Emissions accord good for the air, menacing for, say, a GM truck plant

The Outlook

December 28, 1997|By Ted Shelsby

NEGOTIATORS from around the world have agreed tentatively on a package of measures that, for the first time, would legally obligate industrialized countries to cut emissions of so-called greenhouses gases that scientists say are warming Earth's atmosphere.

Under terms of the tentative accord reached in Kyoto, Japan, the United States will have to cut its emissions by 7 percent from 1990 levels.

The European Union's target was set at a reduction in emissions of 8 percent and Japan's at 6 percent.

In the United States, the world's largest emitter of greenhouse gases, about 20 percent of the carbon dioxide emissions come from cars and trucks.

How will the Kyoto agreement, if ratified by the U.S. Senate, affect the automotive industry?

David E. Cole

Executive director, University of Michigan Office for the Study of Automotive Transportation, Detroit

Change. That's the short answer.

The longer answer is significant change in the things that we do.

There are two paths this issue could take.

One, there could be significant compromises in our lifestyles. The vehicles we drive would have to be much more fuel efficient.

This would probably mean the demise of light trucks, including vans and sport utility vehicles, as we know them today.

Generally, cars would have to get smaller.

Secondly, there would be a significant impact on the whole automotive industrial infrastructure.

When we talk about energy, there are two aspects of it: the energy used by the vehicles and the energy needed to fuel the auto manufacturing plants, the steel mills and other factories.

The idea here is that not just the products we use would change, but the whole auto manufacturing industry would change.

Barring any new technology, we've got a real problem.

It is the kind of thing that would probably push a lot of jobs outside the country. I don't think there is any way around that.

Robert Moss

Vice president, American Automobile Manufacturers Association, Washington

Without the participation of the developing nations in the agreement, the U.S. automakers are going to be placed at a competitive disadvantage.

Simply put, if they go forward and reduce energy use in this country, the cost of manufacturing an automobile here will go up by about 8 percent.

That means that countries like Mexico, Brazil, South Korea, Indonesia and others will have a competitive price advantage because their costs won't have that increase.

The reason that costs go up is because everything that goes into a car -- steel, glass, computer chips and rubber -- are all very energy-intensive items.

It is possible that companies will replace production facilities in this country with plants overseas because of the lower cost of production. It is also possible, because we have an open market, that cars manufactured overseas could be imported here and take market share.

Neither bodes well for the U.S. auto workers.

It could mean that Americans will be forced to drive smaller cars, and this wouldn't be good for the GM plant in Baltimore. The agreement is a very direct threat to the light-truck market, which accounted for nearly half of the new-car sales in this country this year. The vehicles are built to a certain size because they need to have towing capacity, four-wheel-drive and bigger engines for off-road use.

If you have to downsize engines to get more fuel economy, you are also going to have to downsize the whole truck.

That would give the Japanese manufacturers an advantage, because that is what they make.

Edward Lapham

Executive editor, Automotive News, Detroit

It has the potential of having a very profound effect on the industry.

I don't think it is going to ruin the industry. I think the industry will find a way of doing whatever is required of it. But it won't be easy.

The automakers aren't going to roll over and play dead, either. They are going to want to be involved in shaping the regulations. They all have lobbyists, and they are going to be fighting to insure that any new regulations don't unfairly penalize the auto industry.

With something like this everybody has do their part. Everybody has to step forward and say, "Look we've got a problem and we've got to resolve it."

But it will be terrible for a city that has a General Motors truck plant that would be losing a lot of jobs because all of a sudden GM could no longer sell these trucks.

The sport utility vehicles, and some of the bigger pickup trucks, that's the part of the market that will be threatened most.

That's the most profitable part of the market. The automakers make $15,000 on some of their bigger sport utility vehicles, so it is going to affect their bottom line if they have to abandon this segment of the market.

Pub Date: 12/28/97

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.