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The Big Three Press Bush for Alternative Fuel Incentives

March 27, 2007

WASHINGTON, D.C. — The Big Three U.S. automakers recently lobbied President George W. Bush for federal tax breaks to fuel more environmentally-friendly cars.

Bush called the Detroit automakers to the White House to ask them to help meet his goal of cutting gasoline consumption by 20 percent during the next decade through greater use of ethanol and biodiesel fuels, the Financial Post reported.

But the heads of General Motors Corp., Ford Motor Co. and DaimlerChrysler AG's Chrysler Group, said there need to be more tax incentives to encourage the broader distribution of fuels for hybrids in coming years to meet proposed fuel economy standards.

"From the beginning, the focus was placed squarely on biofuel and ethanol," Greg Martin, a GM spokesman, said after the meeting, speaking about the new Corporate Average Fuel Economy (CAFE) rules Bush would like to see.

"CAFE only came up in the sense that the automakers believe if there is CAFE reform it's better done through regulatory and rulemaking processes," he said.

The Big Three CEOs — GM's Rick Wagoner, Ford's Alan Mulally and Chrysler's Tom La Sorda — promised to double their production of flexible fuel vehicles to about two million a year by 2010.

But they also told Bush they could make half of their cars and trucks capable of running on alternative fuels by 2012 if there is enough availability and distribution of E85, an ethanol blend of 85 percent ethanol and 15 percent gasoline.

Currently, only about 1,100 of the country's 170,000 fueling stations offer E85 fuel. The auto leaders said improving the retail distribution system is critical to getting more vehicles running on alternatives.

"We expressed to the president that we are willing to lead the way, but we need government and fuel providers to increase infrastructure before we can make a meaningful impact," the three executives said in a joint statement.

Bush examined several prototype flex-fuel vehicles on the White House lawn, including GM's Chevrolet Impala running on E85; Ford's Edge Hy Series with a plug-in hydrogen fuel cell, supplied by Vancouver-based Ballard Power Systems; and DaimlerChrysler's Jeep Grand Cherokee diesel filled with B5, a biodiesel blend.

None of the executives from foreign manufacturers, which currently lead the alternative fuel market, were asked to attend the meeting.

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