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U.S., Auto Firms Eye Joint Venture

By Peter Behr
and Warren Brown

The Washington Post

WASHINGTON

The Clinton administration and the nation's Big Three automakers are exploring an unprecedented research alliance between government and industry seeking to design a new generation of pollution-free, technologically advanced cars and secure the U.S. industry's competitive future, according to industry officials.

Such a partnership would link the long-term technological and regulatory strategies of Washington and Detroit after a quarter century of friction over safety, trade and environmental issues.

As much as $1 billion of federal research money could be shifted from the national laboratories, the National Science Foundation, the Commerce Department and other agencies to the auto project, sources said.

No agreement has been reached, but auto industry sources said the two sides are close to deciding whether to begin the first stages of such a partnership.

"There's clearly a lot of interest in Washington, I'm glad to say, in getting us all together in a much more cohesive way," said Alexander J. Trotman, president of Ford Motor Co.'s worldwide automotive operations.

The talks with Detroit are part of a broad administration effort to help U.S. industries become competitively stronger.

"For a long time in America, there has been a big debate about whether we ought to have any kind of national economic policy," Commerce Secretary Ronald H. Brown told a U.S. Chamber of Commerce audience Thursday. "I think it's time for that debate to end. This is no longer about philosophy or ideology or about partnership. It's about results, it's about doing what is best for the economic growth and economic future of our country.

Heading the administration's side in the discussions have been John A. Rollwagen, deputy secretary of Commerce-designate who is the former chairman of Cray Computer Co., and John H. Gibbons, the president's science and technology adviser.

Remaining differences between Detroit and the administration include the scope and pace of research work, how the costs would be shared and what one industry executive called "a big trust factor."

Administration officials want Detroit to accelerate its progress toward producing the pollution-free cars that are required by state laws in California and several Northeastern states beginning in 1998. It does not want to see the U.S. carmakers turn to Japan, Germany or South Korea for that technology.

For its part, the U.S. car industry does not want to be forced to make costly commitments to technologies that may not be economical or marketable, an official said. Before a "marriage" can occur, the two sides have to trust each other on the timing question, an official said.

But industry officials said the climate has changed dramatically with the change in administrations.

"I think we're seeing the dawning of a more enlightened America ... an interface between the United States government and the auto businesses," said Trotman.

A full-fledged technology partnership between the administration and Detroit would build on existing research links among the car companies themselves and between the companies and several of the government's national laboratories.

The automakers have already formed a joint research program called USCAR, focused on 10 R&D projects. One is the U.S. Battery Consortium to pursue lightweight, durable batteries that are the key to developing a practical electric car.

Other research targets are cars that run on compressed natural gas and hybrid gasolines, and new, high-combustion engines that produce almost no exhaust gases. The federal government now contributes several hundred million dollars to this research activity.

Detroit executives and scientists say they they do not yet see how the final pollution requirements of the federal Clean Air Act of 1990 and new state laws can be met without sharply inflating cars costs or forcing Americans to give up medium and large-sized cars.

"It's going to take technological breakthroughs to get this done," one industry official said. While administration officials recognize the scope of the challenge, they are not prepared to back off of the clean air goals.

"They want to accomplish a lot -- but they don't want to put us out of business, either," said the industry official.

In particular, administration officials do not want to force Detroit to pursue a technology strategy that might produce some small, short-term gains in pollution control, while foreign competitors concentrate on longer-term solutions that could cripple the U.S. industry competitively, industry officials said.

Some Detroit officials want federal research support in areas other than pollution control, such as safety and electronics. Projects include work on systems that would permit cars to transmit their location to central computers, which would instruct motorists how to avoid traffic tie-ups.

Lightweight car body materials and advanced electronic controls to assist in steering and braking are other high research priorities.