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Toyota Not Among Carmakers Invited To White House

Reuters
Sunday, 25 Mar 2007 | 3:18 PM ET

Toyota Motor is creating U.S. jobs, making friends in Washington and leading in fuel-saving technology, yet will not be at the table when President George W. Bush meets major automakers to talk energy policy on Monday.

Chief executives of General Motors, Ford Motor and Chrysler Group will roll into the White House to discuss Bush's proposal to cut fuel consumption by 20% over 10 years by encouraging gasoline alternatives and imposing tougher mileage standards.

The meeting is central to Bush's push to generate support for his energy proposals, which for autos have received a mixed reception from the industry and congressional lawmakers.

The discussions will build on talks that Alan Mulally of Ford, Rick Wagoner of GM and Tom LaSorda of Chrysler had with Bush four months ago on similar energy issues as well as concerns about Asian currencies and trade.

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All three companies are closing plants, cutting jobs and looking for tax breaks and other government help on energy initiatives to revive their prospects.

Bush irritated automakers and their political allies last year when he said they should build more relevant products. He has been reaching out to them this year.

Japan's Toyota, meanwhile, eclipsed Chrysler in U.S. sales last year and is tailgating Ford now. Analysts expect Toyota to dethrone GM as global sales leader this year.

A sign of growing political respect for Toyota's approach on energy came on March 14 when Jim Press, the company's North American chief executive, testified with Mulally, Wagoner and LaSorda at a House of Representatives Energy and Commerce hearing on some of the topics to be discussed Monday.

Slowly Building Support

Press was invited by Rep. John Dingell, a Michigan Democrat who is a staunch "Big Three" ally and the committee's chairman. Dingell noted Toyota's significance and said energy and climate change should be policy-driven, not political.

Toyota says it is mindful of Detroit's problems and its political and economic significance, especially in the Midwest. Toyota treads carefully in Washington, where it has slowly built support.

"I think we understand the politics of it and understand they have particular issues that have to be addressed," Toyota spokeswoman Martha Voss said of GM, Ford and Chrysler.

With gas prices climbing, an increasing number of consumers have turned away from Detroit's sport utility vehicles and pickups to more fuel-stingy options offered by Toyota and other foreign manufacturers.

Toyota is the world leader in hybrid technology and is researching batteries for electric cars, testing hydrogen fuel cells and working on clean diesel, ethanol and ethanol/gas blends. Those are among key elements of Bush's plan.

The White House said it displayed a modified Prius, Toyota's popular hybrid, at a electric car event this month. But no Toyota officials were present.

Some political and industry experts say Toyota still does not measure up politically on enough counts.

Alan Tonelson, a research fellow at the U.S. Business and Industry Council in Washington, said Toyota should be able to discuss energy issues with the others.

But as for trade policy and other business topics, he said there are "very valid reasons" to exclude foreign manufacturers.

"The best research I have seen is that they don't add as much value to the American economy as the 'Big Three' automakers," Tonelson said.

Peter Morici, an economist and University of Maryland business professor, noted that Toyota builds a percentage of cars domestically but is mostly perceived as a "foreign investor" whose profits flow mainly back to Japan.

Nevertheless, Morici said Toyota probably should be with the others on Monday on public policy grounds, including its potential contribution to a discussion on energy.

"Toyota is gradually going to become the Number Two automaker in the United States. We should be cultivating them," Morici said.

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