Auto Alliance Attack Ads Undermined by UAW, GM and Hyundai Executives

With a final recommendation on the next round of carbon pollution and fuel economy standards expected soon, the Alliance of Automobile Manufacturers (including Ford, Toyota, GM, Chrysler and others) appears to be split on whether launching attack ads are a good or bad idea. As of Thursday evening, the latest word appears to be the ads are back on for Friday, despite the fact that just as late as Thursday morning the AAM said the ads were being pulled.

Theories abound what accounts for the AAM flip flopping. What does seem clear is that the decision must be close and the auto industry is split on what tact it wants to take as the negotiations heads towards the home stretch.  Some in the industry clearly want to move on but others are threatening to give the entire industry a black eye.

The 60-second attack ad (listen to it here) has been roundly criticized as being inaccurate by independent journalist at the Detroit Free Press as well as BNET.  The AAM had purchased time on stations in 14 states, with the plan of spreading its message that a 56.2 mpg standard would have adverse consequences for “preserving jobs, affordability, safety and vehicle choice.”

UAW Supports "Strong Standards"

But the auto industry must also realize that their job loss claims is severely undercut by the other big news of the week, the submission of a joint “blue green” letter by UAW, other unions, and environmental groups (including NRDC) to the President supporting “strong standards”.  Who else better knows the impact of stronger standards on auto jobs then the UAW?

The letter urges the president to back strong standards for many of the same reasons that the AAM says it opposes them:

We encourage you to propose standards that maximize oil savings and reductions of GHG pollution, strengthen the U.S. auto industry, increase the deployment of advanced technology, protect U.S automotive jobs, and create more opportunity for American workers... Building the next generation of advanced vehicles in the United States will create tens of thousands of new engineering and manufacturing jobs and strengthen America’s rebounding auto sector.

Bob King, the President of UAW got it right when he told the Chicago Tribune:

"President Obama saved the auto industry; he doesn't want to jeopardize that," UAW President Bob King said. "To direct this kind of criticism at the administration after what they've done is irresponsible.” 

Hyundai Supports 56.2 mpg

Additionally, the AAM arguments are undercut by the auto maker executives themselves who don't seem to be in agreement with the ads over “preserving…affordability, safety, and vehicle choice”.  According to  AnnArbor.com, Hyundai Motor America CEO John Krafcik  “supports President Barack Obama’s administration’s decision to consider requiring that carmakers achieve corporate average fuel economy of 56.2 miles-per-gallon by 2025.”

Last year, the Korean carmaker committed to reaching a fleet-wide average of 50 mpg by 2025. With a current average of 35.7 mpg, Hyundai aggressive efforts to improve the fuel efficiency of its vehicles pay off in the form of record American sales. As gas prices in many parts of the country surpassed the $4 mark in the first half of 2011, Hyundai sold more cars in the U.S. than at any other point in its history, and now projects a 16 percent sales increase this year above 2010 levels.

Krafcik joins General Motors North America president Mark Reuss in bucking the official AAM line. Last month, Reuss said:

The goal of 56.2 mpg is tough, but General Motors will figure out a way to reach it, said Mark Reuss, the company's North American president. He would not say what technologies GM would use to reach the target, but he conceded that many easier, less-costly solutions already are under way or have been done such as switching to smaller engines and developing more fuel-efficient transmissions.

"When you put those things in for the first time, they may be more expensive," he said. "But this is a volume and scale industry. What was very expensive in the past is no longer very expensive."

The UAW and auto makers breaking off from the party line and the Alliance’s indecisiveness in whether to run radio attack ads is evidence that the auto industry’s façade of unity is crumbling. The AAM's claims that strong pollution and fuel efficiency standards will hurt sales and kill the recovery of the auto sector are based on discredited arguments.  Instead increasingly auto executives, labor, and consumer groups are sending a different message of their own: improving fuel efficiency is good for the environment, good for consumers, and just plain good business.