Thursday, April 27, 2006

Big Three CEOs, Bush set to meet

Thursday, April 27, 2006

Big Three CEOs, Bush set to meet

May meeting will focus on energy, pensions, health care; bailouts are not on the agenda, Bill Ford says.

Micheline Maynard / New York Times

DEARBORN -- President Bush, who touched a nerve this year when he told Detroit carmakers to build "relevant" vehicles, will meet with the companies' leaders next month, Ford Chairman and CEO Bill Ford Jr. said Wednesday.

People involved in planning the meeting, who spoke on condition of anonymity because of the high level of the talks, said it would focus on three areas: energy and the environment; costs like pensions and health care premiums that add hundreds of dollars to the price of a Detroit car; and how currency issues affect Japanese automakers.

The meeting is expected to take place May 18 at the White House. It would be the first time during his presidency that Bush has met collectively with Ford, Rick Wagoner of General Motors Corp. and Thomas LaSorda of Chrysler.

A White House spokeswoman, Dana Perino, said she could not confirm nor deny that the meeting would take place, adding that Bush's schedule is generally not final that far in advance. Officials at GM and DaimlerChrysler AG's Chrysler Group declined to comment.

Toyota Motor Corp., which ranks fourth in U.S. sales behind Chrysler, and which is considering sites for its eighth North American assembly plant, said it was not invited.

Bill Ford, who is known for his interest in the environment, said in an interview that he wanted to use the meeting to lobby the government to finance a national delivery system for ethanol, the grain alcohol fuel made from corn. Together, the three companies have sold millions of flexible-fuel vehicles, which can run on gasoline or a gasoline/ethanol mixture.

GM has introduced a big campaign to promote the use of E85, a mixture of 85 percent ethanol and 15 percent gasoline, blanketing billboards and the sides of buses with the slogan, "Live green, go yellow."

But Bill Ford said many of the 1.5 million buyers who own Ford's flexible-fuel vehicles either do not know they are able to run on both fuels, or are unable to find ethanol-based fuel that would help lessen the country's dependence on oil.

"If the goal is to drive ethanol, you have to have it priced attractively," Ford said. That is a problem because the United States has only 600 stations that dispense ethanol-based fuel, versus about 176,000 gasoline stations.

The discussion over ethanol comes amid rising gasoline prices, which threaten to hurt recovery efforts at Ford and GM. Each lost market share and billions of dollars in North America last year, while Chrysler gained share and made money.

Together, GM and Ford have announced plans to cut 60,000 jobs and close more than two dozen plants through 2012.

After Ford announced its cutbacks in January, Bush said the solution to reversing the automakers' problems lay in developing "a product that's relevant." Rather than having the government bail them out, as Congress did in 1979 to save Chrysler from bankruptcy, "I think it's very important that the market should function," Bush added.

Bob Lutz, the vice chairman of GM who is known for his candor, criticized Bush's comments this month. Speaking in New York, Lutz said: "I'm a lifelong Republican, by the way, but next time around, Hillary, here I come. I'm a protest vote."

Bill Ford said the discussion of a bailout would not be on the agenda for the meeting with Bush, whose former chief of staff, Andrew Card, served as GM's lobbyist before joining the White House.


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