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The Big Three Auto Bailout:
Our Letter to Congress

December 5, 2008

On behalf of Green America’s 120,000 individual members and 5,000 business members we are writing to you to urge that any federal bailout of American automakers be tied to strategies that will both improve American competitiveness in the automobile market and restore our environment.  Specifically, we are asking for the mass production of plug-in hybrids and electric vehicles by 2010; increases in fuel economy to 40 mpg by 2015 and 55 mpg by 2020; an end to the automakers’ opposition to climate change laws and regulations; government oversight of management; and an end to excessive executive compensation, perks, and golden parachutes.

For the past 25 years, Green America has worked to create a green economy, one that creates environmental and socially responsible solutions to our most pressing problems.  We have played a vital role in ramping up solar power, helping green businesses nationwide thrive and grow, and increasing investment in community investing institutions that revitalize low-income communities nationwide.

Our nation’s transportation, energy, and environmental needs require a transformation of the big three automobile companies. If we are to have a viable auto industry in this country that will also contribute to a cleaner planet, American automakers can no longer produce gas-guzzling cars with high climate change emissions.  Instead, automakers should be required to use any federal monies as an investment in mass producing clean, plug-in hybrid and electric cars, which will lead to lower emissions, reduced fuel costs for America’s drivers, and less reliance on foreign oil.  The mass production of plug-in hybrids and electric cars would also be an important first step in creating green jobs that America needs to combat the current recession. 

In addition to putting plug-in hybrids and electric vehicles on the road in two years, automakers need to steadily increase the fuel economy of their fleets overall.  Both Japan and Europe are creating significantly higher fuel economy requirements on automobile manufacturers than the US (nearing 50 mpg), and their auto industries are comparatively robust and are meeting the challenges. There is no reason why US companies cannot meet a target of 40 mpg by 2015 and 55 mpg by 2020.

Over the past two decades, Green America and its allies have encouraged domestic carmakers to produce cleaner cars with higher fuel efficiency and to develop electric and plug-in hybrid vehicles. As they request a bailout from Congress, the automakers may all say they have plans for producing cleaner cars that utilize innovative green technologies. However, they have said similar things before and not followed through. This time, Congress needs to make sure the automakers make good on their promises.

American tax dollars should also not be used to undermine the regulation and reduction of climate emissions. As part of any bailout, automakers should be required to end their lawsuits against state laws and regulations regulating climate emissions. Fifteen states have taken the lead in regulating climate emissions and instead of fighting these efforts, automakers need to create the green cars that consumers increasingly want.

In addition, as many members of Congress, as well as the public, have noted, many of the automakers’ current problems are the result of long-term poor management practices.  Congress needs to provide oversight of management for each automaker it bails out to ensure that public funds are being used to bring innovative plug-in and electric cars to market and not for excessive executive compensation, perks, and golden parachutes.

The new President and Congress are facing many challenges, and this creates the opportunities for real solutions.  The government’s unprecedented bailouts of American companies represent an important opportunity to ensure that corporations are acting on behalf of all their stakeholders, and will create products that will meet the needs of our country, while creating healthier companies and a sustainable environment.  American automobile companies have pursued a path that harmed our environment and led them to the brink of insolvency.  If taxpayer dollars are used to bail them out, please make sure those dollars are tied to requirements to meet (instead of fight) climate change regulations and produce plug-in hybrid and electric vehicles.

Sincerely,                       

Alisa Gravitz                                  Todd Larsen

Executive Director                          Corporate Responsibility Program Director