Former Treasury Secretary John Snow, now chairman of Cerberus Capital Management, spoke at the Detroit Economic Club Wednesday. Cerberus, the private equity firm, is raising money to buy Chrysler, so interest in his remarks was high. The Wall Street Journal covered that side of his appearance today.
From an industrywide perspective, he offered some notable comments about Congress’ strategy of making the auto industry the primary target in its environmental/global warming/mystical legislation. The CAFE standards that came out of the Senate are unworkable, Snow said, and depending on the final outcome, Cerebrus might have to raise more money for the Chrysler purchase. (AP story here.) The Detroit News story quoted Snow:
“The U.S. Senate recently passed what I would call a one-sided approach to fuel economy standards…I say one-sided because automobile use in the U.S. consumes only 20 percent of our national energy usage…
“Let me be clear that we understand the need to wean ourselves off of uncertain foreign sources of energy and gain greater energy independence. As Americans, we understand the value of cleaner air and the need to reduce production of (carbon emissions). But we are also committed to keeping a strong, viable auto industry right here in America with good paying jobs.”
On June 26, Snow reminisced for a bit and then discussed the environmental issues on Paul W. Smith’s radio program on WJR in Detroit. The soundfile is here and you can read the excerpts about CAFE standards in the extended entry.
Paul W. Smith: I must tell that you lately, though that we feel, the auto industry feels, locally, that we’re getting murdered by Washington. Certainly you’ve been aware of what’s been happening with Washington D.C., and them coming down hard on the auto industry, as if the auto industry is fully and solely responsible for environmental issues.
John Snow: Well, you’re absolutely right. I’ve been watching closely these efforts in Washington. The Senate bill that came out last week is one sided. It needs to be fixed. It needs to be improved. I must say, your senators, Senator Levin and Sen. Stabenow, have been doing yeoman work, along with Senator Voinovich from Ohio and the Senators from Missouri and others, but we came up a couple of votes short. We need to go back and fix that.
It’s important that the public understand: The auto industry is committed to better fuel economy. They’re committed to making us less dependent on Middle Eastern oil, and they’re committed to reducing CO2. But we shouldn’t do that by destroying the U.S. auto industry, and the legislation that came out of the Senate needs to be reformed. There are alternatives that are better. Congressman Dingell is going to lead the effort in the House. There’s no more able legislator, the Detroit congressman, longtime chairman of the House Energy and Commerce Committee, terrific champion of good economic policy. I think in the end ….that we’ll come out with a much better result.
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