New DOT secretary confirmed as LaHood exits (Update)

Crain News Service and wire reports

WASHINGTON (June 28, 2013) — The U.S. Senate unanimously approved on June 27 Charlotte, N.C., Mayor Anthony Foxx to head the U.S. Department of Transportation (DOT), a role held for the past four years by former U.S. Rep. Ray LaHood.

Mr. Foxx, 42, joins President Barack Obama's Cabinet after four years as mayor of the 17th-largest U.S. city and four years on the Charlotte City Council. As mayor of Charlotte, Mr. Foxx was a proponent of mass transit and so-called smart growth development, which supports providing a variety of transportation choices, but he has little experience working with the auto industry.

He now will oversee a department with about 53,000 full-time employees and more than $72 billion in budget authority. In addition, millions of Americans are employed in automotive- and transportation-related jobs that his decisions could affect.

Mr. Foxx has promised to continue Mr. LaHood's focus on safety—including a program to reduce distracted driving—while working with Congress and the transportation community to find new ways to fund highway projects and other infrastructure needs.

Mr. LaHood gave farewell remarks at the National Press Club in Washington shortly before Mr. Foxx was confirmed. While much of his speech centered on his accomplishments as transportation secretary and Mr. Foxx's future priorities, Mr. LaHood briefly touched on the recent dispute between Chrysler Group L.L.C. and the National Highway Traffic Safety Administration (NHTSA).

The auto maker initially refused to recall 2.7 million 1993-2004 Jeep Grand Cherokees and 2002-07 Jeep Libertys that the agency said had an increased fire risk when struck from behind. Chrysler later agreed to inspect the vehicles and install a trailer hitch assembly if necessary to "better manage crash forces in low-speed impacts."

Although NHSTA continues to investigate, Mr. LaHood said the department finds Chrysler's remedy to be sufficient.

"The idea that we didn't do enough, or that Chrysler didn't do enough, is nonsense. It goes against everything we believe in," Mr. LaHood said. "They proposed a fix, and they're doing the fix. We believe the fix will keep people safe, once the fix is in place for people who drive these vehicles.

No compromises

Though Chrysler initially refused NHTSA's request for a recall, Mr. LaHood said Chrysler CEO Sergio Marchionne was quick to resolve the situation after the two discussed the matter. Nonetheless, Mr. LaHood told reporters that he doesn't compromise with auto executives on safety.

"And we don't cut anybody a break when it comes to safety," Mr. LaHood said. "I don't care who they are. I don't care what their title is. We've never done that. Nor will we ever do it."

Mr. LaHood pointed out that NHTSA was firm with Toyota Motor Corp. when the company failed to tell the agency about a floor mat defect that allowed the accelerator pedal to become entrapped in 2010 Lexus RX 350 and RX 450h crossovers. NHTSA ordered Toyota to pay a record fine of $17.35 million—the highest NHTSA had ever fined an auto maker and the maximum penalty the agency could assess.

Looking back on his time at the DOT, Mr. LaHood said one of his most significant accomplishments was the cash-for-clunkers program, which gave new-car buyers credit toward a fuel-efficient vehicle if they traded in a less fuel-efficient one.

'Wildly successful'

Mr. LaHood previously hailed the program as "wildly successful." The department reported that the program took nearly 700,000 "clunkers" off the road, and provided customers with $2.88 billion in rebates, slightly less than the $3 billion appropriation for the program.

Mr. LaHood also said he was proud the department established stricter fuel economy standards. By the 2025 model year, auto makers will be required to maintain a corporate average fuel economy (CAFE) of 54.5 mpg. Considering this requirement, Mr. LaHood said he expects most Americans will have a hybrid or electric vehicle by that year.

"I just think that's the direction that people are going," Mr. LaHood said.

In an interview with the Detroit News last week, Mr. LaHood brought up the possibility of a federal Vehicle Miles Traveled tax to fund highway projects instead of the traditional tax on gasoline. He had discussed the potential tax with the Associated Press in 2009.

The White House has said it does not favor the idea, and when asked about the tax today, Mr. LaHood said it wouldn't work unless it came from the federal government. Although states have proposed the tax, Mr. LaHood said they can't afford to fix roads on their own.

Mr. LaHood said Mr. Foxx has told him that he will continue to address distracted driving. He said he's proud that 41 states have enacted laws banning forms of mobile phone use, but said the issue requires attention from Congress.

Reporters Adam Rubenfire, Gabe Nelson and Reuters contributed to this report, which appeared in Automotive News, a Detroit-based sister publication of Tire Business.