Jan. 30 (Bloomberg) -- U.S. auto industry lobbyists and lawmakers are discussing a proposal to give consumers as much as $4,500 in government vouchers to replace older cars with more fuel-efficient vehicles.

The so-called cash-for-clunkers proposal may not win enough support to be added to $819 billion stimulus legislation that passed the U.S. House and will come before the Senate, Alan Reuther, legislative director of the United Auto Workers union, said in an interview today.

Lawmakers including Senator Dianne Feinstein, a California Democrat, have joined auto industry executives in trying to devise ways to boost sales and promote fuel efficiency to help the environment. U.S. auto sales fell to a 16-year low of 13.2 million in 2008 after averaging about 16 million during the past decade.

“A number of offices have been looking at that,” Reuther said of a voucher plan. “But so far there has not been any agreement in the industry or with us. If there is going to be this type of program to help stimulate jobs in the auto industry, we think it is critical the measure is linked to vehicles produced in the United States.”

Talks on legislation are continuing, according to Reuther and a spokesman for Representative Don Manzullo, an Illinois Republican. So far, officials haven’t found a way to ensure the program would benefit American workers only, Reuther said. The plan shouldn’t stimulate production at non-U.S. plants, he said.

GM, Toyota

The Alliance of Automobile Manufacturers, which represents General Motors Corp., Toyota Motor Corp. and nine other automakers, has advocated a proposal to give consumers a voucher toward a new vehicle if they trade in one at least 10 years old.

“This is to get people back into the showrooms,” said Wade Newton, a spokesman for the Washington-based Alliance. “It’s a crisis of consumer confidence, not a crisis of product.”

GM reduced its estimate on Jan. 15 for industrywide auto sales this year to 10.5 million, which would be the lowest level since the 10.4 million units sold in 1982, according to research firm Autodata Corp. of Woodcliff Lake, New Jersey. Automakers slashed production by 23 percent in the fourth quarter.

Feinstein introduced legislation on Jan. 14 that would give drivers a voucher of as much as $4,500 to buy a more fuel- efficient vehicle than one they trade in to be scrapped.

Fuel-Economy Rating

The new or used vehicle being purchased would have to have a fuel-economy rating that exceeds the federal target for that class of vehicle by at least 25 percent, according to the plan, co-sponsored by Senators Susan Collins, a Maine Republican, and Charles Schumer, a New York Democrat.

The scrapping incentive is opposed by the Specialty Equipment Market Association, a group of 7,358 companies that includes firms making and selling parts for older vehicles.

“We’ve got thousands and thousands of American jobs here that generate millions of dollars,” said Stuart Gosswein, director of regulatory affairs for the Diamond Bar, California- based group. “Those jobs are threatened.”

The group instead supports a voucher or tax credit without the scrapping incentive, Gosswein said.

Manzullo proposed such a plan Jan. 27. It would give Americans a $5,000 tax credit to purchase a new vehicle that costs less than $50,000, and $2,000 to purchase a used model through Dec. 31.

“He’s just trying to do anything he can to reignite the car sales,” said Rich Carter, a spokesman for Manzullo, who has a Chrysler LLC plant in his district.

Senator Barbara Mikulski, a Maryland Democrat, and Representative William Pascrell, a New Jersey Democrat, have pushed a plan that would make interest payments on loans, as well as sales or excise taxes, deductible for autos. A family would save $1,553 on a $25,000 car, Mikulski said in November.

To contact the reporter on this story: John Hughes in Washington at jhughes5@bloomberg.net

Last Updated: January 30, 2009 16:59 EST