January 14, 2009 at 1:00 am

Editorial: Spare Detroit automakers car czar's green thumb

House Financial Services Chairman Barney Frank, D-Mass., has proposed a rewrite of the rules of President Bush's auto loan package. (Haraz N. Ghanbari / Associated Press)

Tennessee Sen. Bob Corker, the Republican who wore the black hat during the congressional debate on bailing out Detroit's automakers, visited the North American International Auto Show Tuesday to see firsthand what automobiles mean to Detroit. It would have been more useful had Congress sent U.S. Rep. Barney Frank, D-Mass., the chairman of the House Financial Services Committee.

Frank was the automakers' hero, arguing passionately that Detroit must have the federal loans to survive and preserve millions of jobs. He continues to score points with auto workers by pushing to ease provisions of the White House bailout plan that try to wring huge concessions from the United Auto Workers union. But the fine print of Frank's rewrite of the President Bush loan package could be ruinous for the Big Three automakers by strengthening the powers of a car czar who would oversee how the federal loans are used.

The point of the federal loans is to buy General Motors and Chrysler (and possibly Ford) more time to reduce their financial losses and become competitive. But Frank's proposed legislation requires that the expertise of a proposed car czar or "presidential designee" be as much in gas mileage and the environment as finances.

Having knowledge of fuel economy and environmental laws that apply to the auto industry would be useful for any federal overseer. But Frank's rewrite of the bailout package emphasizes that forcing restrictive fuel economy rules and costly environmental mandates on the domestic automakers are as important as the financial health of the domestic automakers. After indicating that restoring financial stability is the first goal, Frank's bill says its purpose is to ensure:

  • "Such authority and such facilities are used in a manner that ... results in a viable and competitive domestic automobile industry that minimizes adverse effects on the environment..."

  • "Enhances the ability and the capacity of the domestic automobile industry to pursue the timely and aggressive production of energy-efficient advanced technology vehicles."

    Preserving auto worker jobs and retirement benefits as well as stimulating sales of vehicles finish as runners-up in importance.

    This is consistent with what Frank tried to do with the original loan legislation that passed the House but failed in the Senate. It would have required that California and other states be given a federal waiver to impose even stricter fuel economy standards on automakers -- an estimated 44 miles per gallon by 2020 -- than the 35 miles per gallon that the domestic industry and other automakers are being forced to meet by 2020. The federal mandate would cost the Big Three at least $80 billion.

    The California fuel economy mandate, which Obama said during the campaign that he supports, could bankrupt the companies by itself. Auto experts at a Mackinac Center-sponsored forum Tuesday in Detroit -- Paul Ingrassia, a Pulitzer Prize winner and former Detroit bureau chief of the Wall Street Journal, Andrew Grossman of the Heritage Foundation and Sam Kazman of the Competitive Enterprise Institute -- agreed that the Detroit Three automakers need elimination or relaxation of the tougher fuel economy rules to survive and compete.

    The House, Senate and incoming Obama administration should put the brakes on the idea of putting the automakers under the green thumb of a car czar in addition to other federal regulators. Let Detroit's automakers try to get back to doing what this year's auto show demonstrates they still can do: Design captivating cars and trucks.

  • GM exec Ed Welburn, right, discusses the auto- maker's cars with U.S. ... (Charles V. Tines / The Detroit News)