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Advocacy group urges Obama to include auto suppliers in energy proposal

By: By Dustin Walsh
CRAIN’S DETROIT BUSINESS

March 27, 2013

DETROIT — President Barack Obama wants to steer offshore oil drilling revenue to green research — and the automotive industry wants in.

The Motor & Equipment Manufacturers Association, the Washington D.C.-based advocacy group used by the auto industry, sent a letter to the White House Monday urging the inclusion of suppliers in the proposal.

President Obama unveiled the "Blueprint for a Clean Secure Energy Future" proposal last week. The proposal would establish the Energy Security Trust to set aside $2 billion over 10 years from royalty revenues generated by oil and gas development in federal waters on the Outer Continental Shelf.

The funds are earmarked to support research into such initiatives as electric vehicles, biofuels, fuel cells and domestically produced natural gas.

The supply base accounts for 30 percent of the $18 billion research and development investment in automotive, according to MEMA. Also, 70 percent of intellectual capital and deployment of technologies comes from the supply base, the organization noted in the letter.

"This is an opportunity to take advantage of the momentum of change that is now occurring in our industry sector and to learn from the lessons of the past," MEMA President Robert McKenna said in the letter.

However, the proposal is reported to face opposition from Republicans who want to expand drilling to other areas, such as the Arctic National Wildlife Refuge in Alaska.

President Obama will also likely face opposition due to snafus in the U.S. Department of Energy's Advanced Technology Vehicle Manufacturing loan program. The $25 billion program awarded money to Ford Motor Co., Nissan Motor Co. Ltd. and others, including a $528.7 million loan to Fisker Automotive Inc. and a $249 million grant to A123 Systems LLC.

A123, which has plants in Livonia and Romulus, filed Chapter 11 bankruptcy in October, then was acquired by Chinese supplier Wanxiang Group in an auction.

Fisker's founder Henrik Fisker left the electric carmaker he founded earlier this month after the struggling company was unable to close on a deal to sell to Chinese-owned automaker Zhejiang Geely Holding Group.

MEMA was also upset over the ATVM program (Section 136 of the Energy and Security Act of 2007), claiming the DOE didn't include enough suppliers and that the current plan doesn't specify the involvement of suppliers.

"Our history with 136 would indicate that it is easy to neglect suppliers in the process," Ann Wilson, senior vice president of MEMA, said in an email. "Over 100 suppliers applied for the program and none received funding because of a narrow interpretation by DOE."