UAW pushes tax incentive to produce advanced technology
vehicles and components in the U.S.
From the outside, it’s hard to tell a conventional Ford Escape SUV from the hybrid version. But there are some notable differences.
One is the hybrid’s distinctive “green leaf” badge on the back and sides.
The more substantial difference is its sophisticated gasoline-electric powertrain, which allows the Escape to get up to 36 mpg city and 31 mpg highway on the front-wheel drive model, earning the highest U.S. fuel economy numbers for an SUV. (The four-wheel drive model gets 33 mpg city, 29 mpg highway.)
The demand for advanced technology vehicles — whether they’re gasoline-electric hybrids, passenger diesels or hydrogen fuel cells — is rising.
While the environmental benefits are clear, the economic benefits could mostly go to other nations. What’s important is where the jobs building these vehicles and their components will be.
The Bush administration supports a consumer-only tax credit to encourage manufacturers to build energy-saving, advanced technology vehicles and components. The UAW supports this consumer incentive, but wants it coupled with a tax credit for manufacturers who convert existing facilities for production.
“We support consumer and manufacturers’ tax incentives,” said UAW President Ron Gettelfinger, who drives an Escape hybrid. “Coupling the two tax credits would benefit the environment and energy conservation, while at the same time creating jobs in the United States.”
Right now, hybrid versions of the Escape, GMC Sierra and Chevy Silverado are assembled in the United States. Last December General Motors and DaimlerChrysler announced a joint effort to develop a gas-electric power system by 2007. DCX launched the Jeep Liberty diesel model this year.
But the hard truth is that unlike conventional vehicles, most hybrids and passenger diesels are assembled overseas, along with their key components. And the cost to retool American factories to produce these vehicles is high.
A recent study prepared for the National Commission on Energy Policy by the University of Michigan’s Office for the Study of Automotive Transportation (OSAT) — and based on the UAW’s tax credit proposal for manufacturers — found some equally hard truths if domestic production isn’t increased:
• The United States will lose 207,000 jobs through 2009 as sales of hybrids and passenger diesels grow, with the worst job losses in Michigan, Ohio and Indiana.
• The federal government will lose $2.8 billion per year in tax receipts.
The OSAT study also found that a manufacturers’ tax credit would save 59,000 automotive jobs and gain more than $8 billion in federal revenues through 2009.
“Congress needs to understand that 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,” said Gettelfinger.
Each of the Big Three has differing levels of interest in hybrids. Ford,
the furthest along, launched the Escape hybrid this year and expects to sell
20,000.
With a near-seamless system, full hybrids like the Ford Escape use an electric
motor at low speeds, burning less gasoline and producing fewer emissions. At
25 mph and below, it’s quiet and electric; above 25 mph it switches to the
gasoline engine.
The battery pack is the most expensive part of a hybrid because it’s larger and more sophisticated than a regular car battery. Another expensive component is the regenerative braking system, which uses the energy created by braking to recharge the battery. Currently they are built only abroad.
In a hybrid vehicle, the regular transmission is replaced by a device that blends the power from the gas engine and the electric motor. Ford’s Escape hybrid system enables it to run on its gas engine, electric motor or both simultaneously.
Recently described in an auto show summary as “an endearing little beast,” the 2005 Jeep Liberty diesel is built by UAW Local 12 members at Toledo’s North Assembly plant. The Italian-made engine has most characteristics of traditional diesels, which deliver about 30 percent better mileage than their gasoline-fueled counterparts.
DCX plans to produce about 5,000 Liberty diesels annually.
Fuel cells use hydrogen and oxygen to produce electricity, with pure water as the only by-product. Once technical and infrastructure problems are solved, a fuel cell would replace the battery in an electric-powered engine. A manufacturers’ tax credit would also apply to fuel cells, which many experts see as the long-term fix to energy conservation and reducing greenhouse emissions.