The INFLUENCE GAME: US Auto Lobby’s Clout Flagging

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June 17, 2009

THE INFLUENCE GAME: US auto lobby’s clout flagging

ALAN FRAM, The Associated Press

Arrayed like props behind the Rose Garden lectern, Detroit automotive executives applauded last month as President Barack Obama announced new federal standards for gasoline mileage and greenhouse gas emissions.

Many in the auto industry said the moment was a triumph that clinched their long-sought goal of national rules for fuel efficiency and tailpipe pollution, heading off a confusing, state-by state web of requirements. Others say it symbolized just the opposite – a humbled industry forced to swallow tough new mandates– and highlighted the diminished clout of one of Washington’s most potent lobbies.

“You wouldn’t have seen that a few years ago,” Sen. Jim DeMint, R-S.C., a critic of the administration’s auto industry bailout, said of the executives’ White House appearance. “They’re pawns.”

Lobbyists for the Big Three long have been formidable in Washington. They’ve used deep reserves of money and ties to important lawmakers to derail mileage, environmental and safety requirements they considered onerous, and influenced issues such as trade, taxes and health care.

With General Motors Corp. in bankruptcy, Chrysler LLC recently emerged from it and Ford Motor Co. deeply wounded by the recession, their political muscle has atrophied. Their focus now is chiefly on survival, especially GM and Chrysler.

“GM’s restructuring and effort to reinvent itself would consume from 90 to 95 percent of our time at this point,” said Greg Martin, spokesman for the automaker’s Washington office. “If we are not successful in our reinvention effort, some of the secondary issues kind of become irrelevant.”

Besides federal aid, auto lobbyists say they are mostly concentrating on bills providing “cash for clunkers” – tax credits to consumers who trade gas-guzzling vehicles for more fuel efficient ones, with a goal of boosting sagging sales.

Underscoring the high stakes, corporate executives from Detroit are now a common sight in the capital, meeting Obama’s auto task force and other administration officials, visiting members of Congress and testifying to congressional committees.

With sales sharply down, the three companies have all pared lobbying expenses. Chrysler spent $720,000 in the first quarter of 2009, down from $1.2 million during the previous three months, while Ford dropped only slightly to $1.8 million. GM spent $2.8 million, but that was before it fired its outside lobbyists at 15 firms.

That still left GM with at least 13 in-house registered lobbyists – for now. Martin said the lobbying office will be proportional to the new company that emerges from bankruptcy – no doubt smaller than today’s. That points to further reductions for GM. Its $102 million in lobbying since 1998 ranks 16th among all companies, according to the nonpartisan Center for Responsive Politics, which monitors political spending.

“In the good old days, they were the most powerful industry in America,” said Joan Claybrook, who recently retired as president of the consumer group Public Citizen after decades of battling the auto companies. “Their clout is drastically reduced. They’ve been a miserable failure, and we don’t cotton to failure in the U.S.”

The industry’s struggle to endure has led to other lobbying battles.

With the government expected to own 60 percent of GM and 8 percent of Chrysler after their bankruptcies, Ford and foreign carmakers are watching for signs of favoritism. Lobbyists say it’s already happening, such as low-cost government loans that let GM and Chrysler borrow capital far more cheaply than their competitors.

In addition, car dealers, whose presence in every congressional district makes them a robust political force, have gone from powerful automaker ally to nettlesome foe as they battle manufacturers’ plans to shutter thousands of dealerships.

Defenders say the automakers remain a force in Washington. They point to the more than $80 billion the government has provided GM and Chrysler, their suppliers and their credit subsidiaries, and to Obama’s task force.

They cite industry-government talks that produced Obama’s proposed fuel efficiency and emissions standards and details the industry won, such as credits for developing vehicles that run on certain ethanol fuels. They point to successful lobbying on the Senate’s cash-for-clunkers bill, overcoming pro-environment lawmakers who wanted to require eligible new cars to get better mileage than the legislation allows. They say they were able to best environmentalists who wanted higher gas mileage standards for new cars to be eligible for the Senate’s cash-for-clunkers bill.

“It’s not how many lobbyists they have,” says Sen. Carl Levin, D-Mich., an important friend of Detroit. “It’s how many people are affected by the well-being of the auto industry.”

That includes the thousands still employed by the car companies, even though those numbers are down starkly. Combined, the Big Three employ more than 160,000 people in the United States, with hundreds of thousands more at suppliers, dealers and other companies relying on their business.

Lawmakers’ “political interest is making sure the economy recovers, and this major part of the economy not only recovers but does it in a way that is viable and competitive,” said Dave McCurdy, president of the Alliance of Automobile Manufacturers, which represents the Big Three and eight foreign-based vehicle manufacturers.

Even so, the auto industry was hurt when longtime champion Rep. John Dingell, D-Mich., was replaced this year as chairman of the pivotal House Energy and Commerce Committee by liberal Rep. Henry Waxman, D-Calif.

Climate-change legislation that could hurt automakers is but one example of how Democratic dominance of the White House and Congress. There’s also the public’s growing concern about the environment and fuel prices. In all, it makes Washington a tougher town for automakers, especially as they rely on taxpayers to stay alive.

Dan Becker, director of the Safe Climate Campaign, a foundation-backed environmental group, summed it up this way:

“It’s a little hard to wield a bludgeon against the environment when you’re shaking a tin cup with your other hand.”