UAW Welcomes NCEP Support for Proposal to Encourage Production of Advanced Technology Vehicles and Components in U.S.

DETROIT, Dec. 8, 2004 -- UAW President Ron Gettelfinger today welcomed the National Commission on Energy Policy's support for a proposed tax credit for manufacturers to convert existing automotive parts and assembly plants to the production of fuel-efficient advanced technology powertrain components and vehicles. The NCEP is an independent, bipartisan commission of 16 energy experts from industry, government, academia, labor, environmental and consumer groups.

"The UAW strongly believes that tax incentives aimed at encouraging the production of fuel-saving advanced technology powertrains and vehicles in the U.S. would yield tremendous dividends in the form of improving our environment, reducing our dependence on foreign oil and preserving good jobs in America's auto industry," said Gettelfinger.

"Consumer interest in advanced technology vehicles such as gas-electric hybrids and advanced or 'clean' diesels is clearly growing," Gettelfinger said. "Currently, three hybrid vehicles -- the hybrid versions of the Ford Escape, GMC Sierra and Chevy Silverado -- are assembled in the U.S., and more U.S.-assembled hybrid vehicles will be in the market within the next three years. But the key powertrain components for all these hybrid vehicles are manufactured in Japan and Europe, which means that we're missing out on the opportunity to create good jobs and grow our economy."

The NCEP's recommendation for a manufacturers' conversion tax credit is based on a study conducted for the commission by the Office for the Study of Automotive Transportation at the University of Michigan, Ann Arbor.

"The OSAT study makes clear that, at least in the near and medium term, growing U.S. sales of hybrids and advanced diesels largely will be served by foreign production of both vehicles and advanced technology powertrain components," Gettelfinger said. "And that means consumer-only tax incentives for the purchase of vehicles with fuel-savings technologies, such as the consumer tax credit contained in energy legislation considered by Congress, would amount to a large and direct subsidy to foreign-produced vehicles and components, and would without question hurt the U.S. economy."

"In contrast, the OSAT study projects that tax incentives for manufacturers to convert existing facilities to the production of hybrid and advanced diesel components and vehicles would create thousands of jobs in America -- and more than pay for itself over time through increased federal, state and local tax revenues," Gettelfinger noted.

"By coupling the consumer tax credit with the manufacturers' conversion tax credit, we can encourage both the sale and production of fuel-saving hybrids and advanced diesels in the United States. And that would be a 'win' for consumers and workers, as well as from the standpoint of improving our environment and reducing our dependence on foreign oil," Gettelfinger said. "The UAW urges Congress and the Bush administration to incorporate this balanced approach into the next energy bill."

While commending the NCEP for a "wide-ranging and thought-provoking report that will advance the public debate," Gettelfinger stressed that the UAW did not agree with all of the commission's recommendations, specifically the commission's call for a "significant" increase in federal CAFE standards by 2010.

"The UAW will only support increases in CAFE that are technologically and economically feasible, do not cause job loss in the U.S. auto industry, and do not discriminate against full-line producers," Gettelfinger said.