Fight between oil and auto companies
WASHINGTON - With consumers again facing rising gasoline prices, the two industries most often blamed for the energy crunch -oil and auto companies- are trading potshots over who is at fault.
Audiostream:
In an unusually public exchange, a senior official at DaimlerChrysler AG’s USA unit has publicly slapped Exxon Mobil Corp., the world’s most profitable company. The sniping frames a question fraught with economic implications at a time when the nation’s heavy fuel use has become a bigger political football: Should either oil companies rolling in profits or car makers selling gas guzzlers be blamed for America’s oil dependence?
Earlier this week, Jason Vines, vice president of communications for DaimlerChrysler’s USA arm, suggested that oil companies are contributing to high prices in a particularly blunt posting on a blog published by the company for reporters and financial analysts.
Auto makers „have spent billions developing cleaner, more efficient technologies”, Mr. Vines wrote. „Big Oil would rather fill the pockets of its executives and shareholders, rather than spend sufficient amounts to reduce the price of fuel, letting consumers, during tough economic times, pick up the tab.”
The posting was in part a response to a recent Exxon Mobil ad in several newspapers that put the onus for today’s energy crunch on auto makers. Under a cartoon of a monster sport utility vehicle filling up at the pump, the ad hinted that blame lies with an auto industry that knows how to build more fuel efficient vehicles but isn’t rolling them onto the market.
Noting that the average fuel economy of new USA autos hasn’t improved in two decades, the ad argued that improvements in engine efficiency have been „largely offset” by the rising weight of vehicles, notably pickup trucks and sport utility vehicles. The squabbling comes as the Energy Department is predicting gasoline prices will be at least 25 cents higher per gallon than last summer.
It also marks only the latest outbreak of tension between the two industries, which have quarreled repeatedly in recent decades over how to address the nation’s dependence on oil. The chicken and egg fights have common themes: The oil industry argues the auto industry should clean up its cars, and the auto industry argues the oil industry should clean up its fuel. This time, their antagonism is being aggravated by the industries’ diverging fortunes. Oil companies are raking in record profits, thanks in part to rising oil prices, while those prices -along with rising foreign competition- are badly hurting USA auto makers.
While the industries’ earlier fights have centered on efforts to reduce the pollution coughed out when cars burn fuel, this one concerns a harder challenge: limiting the amount of fuel cars burn in the first place. As debate heats up in Washington over curbing USA energy consumption, both to reduce foreign oil dependence and to combat global warming, the fight between the two industries underscores that achieving that goal will require hard political choices.
In January, President Bush lamented in his State of the Union address that the country is „addicted to oil.” He called for more investment in alternative fuels as one response. His administration also recently agreed to steeper standards that will require auto makers to make SUVs, minivans and pickup trucks more efficient - though not as efficient as environmentalists wanted. The two largest USA auto makers, General Motors Corp. and Ford Motor Co., remain heavily dependent on SUV sales and are both launching new and redesigned big suv models later this year. (The Wall Street Journal)
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