McCain says states should set fuel efficiency rules

WARREN, Mich. – Sen. John McCain said Friday that states should be able to determine their own fuel efficiency standards.

The policy, which a dozen states are pushing, is strongly opposed by the domestic auto industry as a job-killing proposal that would seriously harm the industry.

McCain made his remarks before an audience of about 500 General Motors employees in Warren, Mich.

“It’s hard for me to tell states that they can’t impose whatever standards they decide to impose,” McCain said. “I want to see Rick (Wagoner, GM’s CEO) sit down with the governors and ask them what they need.”

Wagoner said after the meeting that the company would prefer a national standard rather than state-by-state standards.

“We think the current CAFE standards are challenging and we’d like to focus on working on them,” he said.

McCain also said he hopes that all future vehicles will be flex-fuel vehicles powered by ethanol products or electricity.

McCain laid out his plan to help the auto industry, including a $5,000 tax credit for people buying low-emission vehicles, a $300 million prize for the company that creates the first commercially available battery-powered car, and job retraining programs for displaced workers.

“The eyes of the world are now on the Volt and this will not only be about the jobs or economy of this great and beautiful state,” McCain said. “It’s also about the future of the world. We have to eliminate our dependence on foreign oil as a national security issue.”

Meanwhile, Illinois Sen. Barack Obama, the presumptive Democratic nominee for president, sent a letter addressed to “Dear UAW Brothers and Sisters,” outlining his plans for the economy overall and the auto industry specifically. He wants to create a $150 billion fund to invest in clean energy technology that can be used by the auto industry, more tax rebates and middle-class tax cuts to provide immediate relief and worker training programs.

Detroit automakers and their foreign rivals have united in opposition to efforts by California and 16 other states to set greenhouse gas controls on cars and trucks that would effectively set fuel economy limits tougher than federal standards. The proposal would force the industry to hit roughly 35 miles per gallon by 2016 and more than 40 mpg by 2020.

California and other states say their program is no different from previous laws that controlled smog and other pollutants from vehicles, which automakers also initially opposed. They also say automakers have the technology to meet their standards, a view that two courts have upheld so far.

But automakers and dealers say state officials overestimate their technology, underestimate the costs and ignore the possible chaos from limiting vehicle sales on a state-by-state basis. GM has previously said the rules could force it to spend $25 billion and still not guarantee it would hit the targets in all states.

The Bush administration last year denied California’s request to put its rules into place. A bill to overturn the decision in the U.S. Senate was backed by both McCain and Obama, who has consistently supported California’s efforts.

McCain also toured GM’s facility to see the Chevy Volt, an electric-powered vehicle that is supposed to be commercially available by the end of 2010. He called it “another great leap forward in American history.”