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A reason for UOP's selection that seems more persuasive than any of the above is price. Mr, Heinen testified that the September contract was made by submitting a list of four acceptable companies to the Chrysler purchasing department and letting them pick the lowest bidder. Tr. 3148, 3152. See also Tr. 1121, 1123, 1135. The August work sheets in C. Doc. Vol. I are entirely consistent with this testimony, for they are set up to compare four companies on the basis of price alone. Mr. Bright testified that price was an important factor, Tr. 1134, 1140, as did others, Tr. 1101, 1105, 1114. I find that a price comparison among companies was in fact a dominant influence in the decision.
The difference in the ultimate price of the car that would have resulted from accepting the Engelhará September quote rather than the one made by UOP appears to be $5. Tr. 2946.
It is even clearer that price was a primary motive for the choice made in March of 1973 to place 100% of Chrysler's catalyst requirements with UOP. The documents provided us for the period September 1972 to March 1973 place some stress on the fact that UOP catalysts are cheaper than Engelhard, although they may not perform as well. The difference is variously attributed to a lower UOP precious metal loading, EPR Minutes 1/23/73 (research report), and Engelhard's tighter quality control, EPR Minutes 1/10/73 and 1/23/73.
Catalyst quality aside, there are certain advantages to any manufacturer in having more than one source for such a vital part as a catalyst. A variety of sources spreads the risk of shutdowns and other production difficulties. The Chrysler testimony indicates this was realized. Tr. 3216.
The record is plain, however, that the risk of having only one source was taken because that was the cheaper course. EPR Minutes 11/28/72 ("Mr. Bright commented that from an economic standpoint, Corning-UOP may be the best single source combination ... All things considered, we could decide to risk the single source situation.") (emphasis supplied). He testified to the same effect at the hearing. Tr. 1163.
The amount saved per car by this choice (on the basis of two catalysts to a car) was apparently about $7 a car on the 40% of Chrysler production for which the choice of a supplier other than VOP was still considered open at that time.
Tr. 3213, Ex. P-52, C. Doc. Vol. I.
Senator MUSKIE. Before the Administrator delivers his statement, I would like to place these hearings in perspective.
On June 24, 1964, an auto industry spokesman made the following statement to this subcommittee :
The industry believes that maximum progress can be made in communities, or States, or areas, by :
(a) thorough evaluation of community air quality.
(c) control of emissions by establishment of performance sta ndards rather than design standards.
(d) establishment of a maintenance and surveillance program in conjunction with required source controls ... Effective progress can be made only when the specifics of the problem have been defined and are well understood ... I repeat our pledge to work unstintingly on this problem in the public interest.
In 1970, 6 years later-after nearly 15 years of developing information on community air quality in the public health service:
-after more than 5 years of careful evaluation of the relationship of auto pollution to air quality;
--after 5 years of experience with limited Federal authority to regulate motor vehicle emissions;
-after 3 years of experience with national motor vehicle emission controls; and
-more than 1 year after the auto industry had agreed at the White House to achieve clean car goals by 1980, the Congress passed the Clean Air Act of 1970 which accelerated the deadlines for production of automobiles which would permit achievement
of clean, healthful air in our Nation's cities. Now, in 1973, we are told that those deadlines cannot be met. In most cases the auto industry argues that they cannot produce and guarantee cars which comply with auto emission standards set forth in the law. And, they argue that even if they could, those standards are not necessary.
I want to know why not. I want to know what the industry has done in the past 3 years. I want a public explanation from the industry for the course they have chosen, a course that has not been altered since 1969.
I want to know what the industry is going to do in the coming year to overcome past failures.
I want to know what commitment the auto industry is willing to make to the American people. And, I intend to challenge the assumptions on which the industry's failures have been based.
These hearings are the beginning of the investigation of that failure. I look forward to whatever enlightenment is available.
I think maybe what I have tried to say is better said in an editorial which appeared in the Wall Street Journal on April 13.
Without objection, I will put the whole editorial in the record, but I would like to read these two paragraphs:
Detroit could strike a more positive posture by squa rely confronting the questions raised by Senator Muskie. What is the industry willing to commit itself to?
When will it commit itself to do it? And what guarantees is it willing to give the public?
The auto makers, after all, are in no position to make credible presentations
[From the Wall Street Journal, April 13, 1973)
A MATTER OF EMPHASIS
Now that Detroit has the extra year it sought in meeting the 1975 air-emission standards, it is embarking on a campaign to persuade Congress to roll back those standards as set in the Clean Air Act of 1970. While we applaud the decision by the Environmental Protection Agency, we have our doubts about the automakers' reaction.
Not that we think those standards should be thought of as being etched in stone. On the contrary, we're pleased that EPA Administrator William Ruckelsbaus has asked Congress to consider a possible relaxation of the strict limit on nitrogen oxides now set for 1976. A number of eminent California pollution experts have all along believed Congress went overboard in setting the standards, and even a fractional lowering of them might save billions of dollars with no penalty to the public health.
Rather, our doubts about Detroit's apparent decision to mobilize its considerable influence in a political attack on the standards have to do with the matter of emphasis. While it is obviously to everyone's benefit that the standards, be reeraluated upon the presentation of fresh data, this should not be Detroit's primary focus. Instead, it should be mobilizing to meet the existing standards as set by EPA and the Congress, and give every appearance of doing so.
Why? Insofar as we can gauge the public mood, the EPA decision was a
Having been given a year's grace, the manufacturers above all else must
There are, of course, environmental zealots who wish to punish Detroit for
OPENING STATEMENT OF HON. JENNINGS RANDOLPH, A U.S.
SENATOR FROM THE STATE OF WEST VIRGINIA
Senator RANDOLPH. Thank you, Mr. Chairman.
Administrator Ruckelshaus, I think your decision was a proper one. I believe it was a realistic determination of the role that you had to play under the Clean Air Act, a responsibility that you had to assume. This had been given to you by the provisions of the act, itself. The act of 1970 established the emission production goals for automobiles.
The chairman of our subcommittee, Mr. Muskie, knew they were strict. All members of the Subcommittee on Air and Water Pollution knew that they were strict. Our committee, the Senate and the House, the Congress, knew that they were strict. We felt that these goals, however, were necessary for the protection of public health, and we felt that they were realistically attainable.
We certainly understood that it would not be easy to affect the emission reductions that had been mandated by the law.
As Administrator, you had the authority under the act to delay the implementation of the called-for reductions for 1 year under certain conditions. I do not think of these hearings—as significant and important as they are—as an attempt by the subcommittee or the members of the committee to second-guess what you have done, Administrator Ruckelshaus, in granting a 1-year delay.
The purpose, as I sense it, is to review the rationale that caused you to render your decision and to assess and this is very important to me—what that decision portends for the future.
As we examine your decision in the context of the efforts that must be made to reduce automobile emissions in 1976, we are faced with the statutory fact that the permissive provision under which you rendered your decision allows for only one, not two, extensions of the deadline.
Now that the extension has been made, as you have made it in a somewhat limited way--I think the granting of it was realistic—there can be no further postponement of the deadline. Emission standards, under the act, must be implemented on 1976 model cars.
When you announced your decision I issued a statement and I ask unanimous consent, Mr. Chairman, that that statement be included at this point in my remarks.
[The statement referred to follows:
FROM THE OFFICE OF SENATOR JENNINGS RANDOLPH OF WEST VIRGINIA
APRIL 11, 1973
SENATOR RANDOLPH SUPPORTS ADMINISTRATOR RUCKELSHAUS IN TRANSITION DECISION
Senator Jennings Randolph, Chairman of the Senate Committee on Public Works, today issued the following statement :
“The decision announced today by William D. Ruckelshaus, Administrator of the Environmental Protection Agency, is a reasonable interim action on the implementation of the 1975 requirements of the Clean Air Act for automobile emission reductions.
"His schedule for compliance with the Act appears consistent with its provisions and our understanding of the technological ability to meet these requirements by 1975. In making his decision, the Administrator exercised the responsibilities given to him by the Congress.
"I have carefully reviewed Mr. Ruckelshaus' statement and believe it vindicates the action of the Congress as stated in the Clean Air Act.
"His adoption of procedures to obtain a realistically phased compliance with the Act is a proper approach under the existing circumstances.
"This decision was based on extensive hearings conducted by the Administra-
"The one-year extension for compliance with standards established under the
"It is important to remember that the one-year extension is the only one pos-
"During the hearings which the Subcommittee on Air and Water Pollution will bold on this subject next week, I intend to explore with the Administrator questions relating to:
-The effect of EPA's action on achieving on schedule health-related ambient air quality standards;
-Additional strategies to achieve health standards which might be considered by EPA, including transportation and used car controls ;
-Alternatives to the present catalyst-based systems which do not adversely affect driveability or fuel consumption; and,
-Alternatives to the conventional internal combustion engine that have
Your action, Administrator Ruckelshaus, I believe, reduces that
There are several areas where you can help us as we look at the act
This will be of interest to us.
. You looked, perhaps, at the developments in Germany and Japan, in particular, as perhaps encouraging, and apparently give little weight, very frankly to the industry contention at some points at least, in some companies regarding developments
So it is my hope, Mr. Chairman, that the 1-year extension will not weaken the purposes of the act and will not remove responsibility from the automobile manufacturers. But, rather, will encourage future