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Kerry's CAFE

John Kerry talks about being the champion of the American worker. Auto-industry workers should look at his record.

11:00 PM, Mar 31, 2004 • By TRENT WISECUP
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JOHN KERRY is betting much of his presidential campaign on voter anger over lost American manufacturing jobs in the industrial Midwest. Seldom does a day go by without a Kerry attack on lost jobs in battleground states such as Michigan, Ohio, and Missouri, often wrapped up in hot rhetoric about American jobs being out-sourced to low-wage countries such as China, Mexico, and India.

Great Lakes industrial workers would be well advised, however, to carefully check Kerry's Senate record. Few in Congress have worked as aggressively to hobble the most important industrial sector of the Great Lakes economy: the American auto industry.

In 2002, Kerry introduced legislation that would have raised mandatory fuel economy standards (CAFE) for SUVs, pickups and minivans (considered light trucks by regulators) from 20.7 mpg to 35 mpg--a 69 percent increase. Light trucks, which now account for more than 50 percent of vehicle sales in the United States, are far and away the most profitable products offered by Detroit's Big Three automakers and the core of their business. American auto companies have been very successful in making the light trucks and SUVs American consumers want to buy and are investing in new technology to improve fuel economy in the years ahead. But Kerry's CAFE demands would be impossible for the automakers to meet without years of costly re-designs and significant lost sales. Prices would rise by thousands of dollars forcing middle class buyers into the sedan market dominated by foreign automakers.

IN 2003, Toyota topped the U.S. car market with 858,253 vehicles sold. Not surprisingly, its flagship vehicle, the Camry, was the top selling car in America. The Honda Accord was a close second. Detroit is making a push to stop its hemorrhaging in the car market, but the Japanese automakers have established a foothold here that will be difficult to break. According to January sales data, Detroit had only 43.4 percent of the domestic car market, while foreign nameplates controlled 56.6 percent.

Clearly, Toyota, Honda, and a resurgent Nissan would be in a much stronger position to comply with Kerry's CAFE mandates. The net effect of his policy would have been an "outsourcing" of United Auto Worker (UAW) jobs from the Midwest to Asian plants or the non-union factories of foreign automakers in right-to-work states in the Deep South. It is ironic that Kerry's rhetoric on the loss of manufacturing jobs skates close to protectionism, while his policy on CAFE punishes the American auto industry for its success in the light truck market where it enjoys a significant advantage: During the same sales period cited above, Detroit produced 9 of the top 10 selling light trucks in the United States.

If Kerry's CAFE increase had been enacted, the Big Three would have been severely weakened and their ability to honor UAW wage, pension, and health benefit obligations would have been threatened. Slacking SUV, pickup and minivan sales would shut American auto plants and accelerate Toyota's efforts to become the world's largest automaker. That's why the UAW and Michigan's two Democratic Senators, Carl Levin and Debbie Stabenow, led the fight to kill the Kerry CAFE increase on the Senate floor.

According to the Alliance of Automobile Manufacturers, the automobile industry is responsible for 13.3 million jobs in the United States--roughly one out every 10. In battleground states Michigan, Missouri, and Ohio, which collectively account for 48 electoral votes, the industry supports more than 1.8 million jobs.

JOHN KERRY has been quick to proclaim himself a savior of American jobs. But when faced with the dilemma of choosing between union autoworkers with the kind of well-paying manufacturing jobs he champions and the forces of liberal environmentalism within the Democratic party, he has proven to be no friend of the American autoworker.

Trent Wisecup is a political consultant with Navigators, LLC in Washington, DC. He has worked actively in Michigan GOP politics for ten years.