Ford chief interested in gas tax proposal

BUSINESS DIGEST

August 09, 2007|By Detroit Free Press

TRAVERSE CITY, Mich. -- Ford Motor Co. chief executive Alan R. Mulally expressed interest yesterday in 50-cent-per-gallon gasoline tax proposed by Rep. John D. Dingell, the Michigan Democrat who heads the House Energy and Commerce Committee.

Mulally, speaking at the Management Briefing Seminars, said a gas tax would be a method to include consumer choice in the debate over how to improve fuel efficiency in the United States.

"It's one way you can get at it," he said, referring to gasoline taxes in Europe that have raised fuel prices to $7, $8 or $9 a gallon.

When pressed by reporters after his speech, Mulally stopped short of directly endorsing a gasoline tax increase, either personally or on Ford's behalf.

"The reason I made the comment is, I think it's so important that we all join in this debate and we really decide what we all want to do about energy security and global warming," he said.

"A piece of that could be a tax," he added. "I don't have a thought past that, but I think it's great that our political leaders are dealing with the situation in a robust way."

In a proposal he plans to make next month, Dingell wants to pair a gas tax with a separate tax on carbon dioxide emissions of $100 per ton. He disclosed the proposal Tuesday.

In a panel discussion after his speech yesterday, Mulally railed against the corporate average fuel economy (CAFE) standard and efforts by Congress to boost the fuel economy mandates to 35 miles per gallon for all automakers.

Ford, General Motors Corp., Chrysler LLC and Toyota Motor Corp. are united in their opposition to the fuel economy increase approved by the Senate in June, which calls for automakers to hit a standard of 35 mpg by 2020.

The industry's alternative, a House bill sponsored by Reps. Baron P. Hill, an Indiana Democrat, and Republican Lee Terry of Nebraska, would let federal regulators set a standard of between 32 mpg and 35 mpg by 2022.

While the numerical difference between the bills appears small, each contains a host of other rules that would control how difficult it would be for automakers to meet the targets.

Mulally said the CAFE issue has been the biggest surprise he's encountered since becoming chief executive officer at Ford in September after a long career in the aircraft industry at Boeing Co.

"I've never seen as big a market-distorting policy as CAFE," he said, arguing that the policy, first implemented in 1975 when 28 percent of U.S. oil was imported, has failed because oil imports are now 68 percent of U.S. consumption.

Asked if a higher gas price at the pump would really change consumer behavior, Mulally said, "It already has, with the decline in SUV and big truck sales."

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