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Tuesday, January 27, 2009

Obama Favors Allowing States to Set Their Own Emissions Rules- Rust Belt Howls

WASHINGTON — In a move that could put even more pressure on faltering automakers to quickly produce higher-mileage vehicles, President Barack Obama on Monday ordered the Environmental Protection Agency to review whether states should enforce their own greenhouse gas emissions rules for vehicles.

Such a move could allow California and 13 other states to set their own emissions standards — well over what is required under the current national standard. Obama also ordered the U.S. Transportation Department to work with automakers to make more fuel-efficient vehicles by the 2011 model year.

U.S. Secretary of Transportation Ray LaHood "downplayed the degree of fight-back likely from Detroit" if the EPA grants California and other states a waiver to enforce the rules, according to "The car manufacturers knew this was coming," LaHood said. "I don't think you're going to see them get a lot of heartburn over this." Automakers opposed such a move during Obama's presidential campaign.

But Senator George Voinovich, R-Ohio, from the heartland of American auto manufacturing, fired back with a written statement that warned: "I am fearful that today's action will begin the process of setting the American auto industry back even further. The federal government should not be piling on an industry already hurting in a time like this."

As if to underscore Voinovich's words, General Motors, moments after Obama's announcement, said it will cut 2,000 jobs at plants in Michigan and Ohio and will halt production for several weeks at nine plants over the next six months due to slow sales.

The Associated Press reported that about 1,200 workers will be laid off at the GM Delta Township plant near Lansing, Michigan, on March 30, while 800 jobs will be cut at GM's Lordstown, Ohio, plant. The shutdowns come a month after the automaker temporarily closed 20 factories across North America due to weak demand.

Last week, the National Automobile Dealers Association warned of "irreparable harm" to the auto industry if the state rules are enforced.

Still, Obama tied environmental and energy issues to national security and the economy before signing the EPA memorandum to reconsider an application by California to set more stringent auto emissions and fuel-efficiency standards.

"America will not be held hostage to dwindling resources, hostile regimes and a warming planet," he said. "No single issue is [more] fundamental to our economy than energy."

Inside Line says: No doubt that energy independence will come with a steep price tag, especially for the Detroit automakers. — Anita Lienert, Correspondent