Just as Congress hunkers down over that Chrysler Corp's bid for massive federal assistance. the American Motors Corp. has come knocking on its door in pursuit of another form of relief.
Rather than seeking financial aid, AMC is asking for a short-term exemption from federal fuel-efficiency standards, claiming it can comply with the spirit but not the letter of the rules.
But an exemption, in legislation tailored to AMCs needs, could save the relatively small automaker millions of dollars in possible penalties during the early 1980s.
The distinction between AMC's request and the Carter administration's proposal to rescue Chrysler with up to $1.5 billion in federal loan gurantees is of keen importance to lawmakers, among them Senate Banking Committee Chairman William Proximire (D-Wis.), a leading critic of the proposed Chrysler bailout.
AMC may be the smallest of the nation's four domestic automakers, but it is very big in Kenosha, Wis., with 12,000 employes at a plant there.
Hence Proximire is considering cosponsoring the AMC relief bill with Sen. Gaylord Nelson (D-Wis.), who is drafting it.
American Motors, only recently eclipsed by Chrysler as the weakest of the country's carmakers, has been the recipient of government aid in the past. But it is on the rebound. its financial underpinning recently buttressed by a partnership with Renault, France's government-owned auto manufacturer, and a promised $150 million infusion of capital from the French firm.
According to AMC's congressional bossters, the automaker will be unable to meet the government's rising fuel-efficiency requirements between 1982 and 1985 as it builds toward full production of the gas-saving Renault cars in the United States.
As of next year, automakers will have to meet separate miles-per-gallon fleet average standards for domestic andforeign-produced cars. They will not be able to combine the mileage of each feet to compute averages, as they do now.
By 1982, AMC will exhaust its available technological resources to reduce the gas consumption of its own domestic-produced cars and will violate the standards for the first time, according to Keven Gottlien, Nelson's legislative staff director. Domestic production of the high-mileage Renault is expected to bring AMC's fleet average for U.S. produced cars wihin the standard by 1985, Gottlieb said.
Renaults will begin rolling off the Kenosha assembly lines by 1983, but less than 75 percent of their components will be American-made, said Marvin Stucky, AMC vice president for governmental affairs. Seventy-five percent is the threshold for determining whether a car can be considered domestically produced when it has a mixture of American and foreign components.
Thus for three years, if there is no change in the law, AMC will be in violation of the fuel-efficiency standards, which will rise from 18.5 miles per gallon this year to 24 mpg in 1982 and 27.5 in 1985. Gottlieb said AMC's fleet currently has a 19.5 mpg average, but that will rise to only 22.5 mpg by 1982. By 1985 the American-produced Renault will bring AMC well within the government's standards again, Gottlieb said.
If a carmaker fails to meet the efficiency standards, it is liable for fines on its entire fleet. A Department of Transportation official cited his example: if AMC's fleet averages 27 mpg instead of 27.5 mpg in 1985, it would have to pay $5 for every tenth of percentage point under 27.5, or $25 per car. That would amount to $3.4 million if AMC were maintaining its current production of 175,000 cars a year at that point.
According to Gottlieb, Nelson's legislation would permit the government to count up to 150,000 foreign-made cars as having been domestically produced for any auto manufacturer with worldwide production of 300,000 or fewer cars a year. This, he said, wuld effectively limit the exemption to AMC. The automaker also would have to convince the secretary of transportation that it lacked the technology to reduce its fleet average fuel consumption on its own.
Although Nelson supports the Chrysler loan guarantee program, under which the government would stand behind up to $1.5 billion in private bank loans to the company, Gottlieb said the two proposals are different because AMC's involves no claim on the federal Treasury and the company is not in financial trouble.
Proxmire's staff, saying AMC presents a "unique stituation" that is not analogous to Chryslers plight, said Proxmire is leaning toward cosponsoring the legislation but hasn't made up his mind.
The Carter aministration, which did not respond favorably to Chrysler's bid for an exemption from the fuel standards or to industrywide proposals for an across-the-board relaxation, has not taken a position on the AMC bid. One factor being weighed is that an AMC exemption "could open a floodgate" of pressures for other modifications, said Joan Claybrook, head of the National Highway Traffic Safety Administration.
The United Auto Workers union, which represents AMC workers. Is supporting the exemption although it genrally opposes any relaxation in the fuel-efficiency standards. The UAW had lobbied for the separate domestic and foreign standards to keep American companies from relying on foreign operations to meet fleet average requirements, but it contends the separate standards weren't intended to apply to a situation like the AMC-Renault joint venture.