Newcomers (Mostly Bushies) Represent Auto Industry in D.C.

The Center for Auto Safety is the nation’s premier independent, member driven, non-profit consumer advocacy organization dedicated to improving vehicle safety, quality, and fuel economy on behalf of all drivers, passengers, and pedestrians.

By Harry Stoffer
Automotive News / July 12, 2004

WASHINGTON — Automakers’ Washington offices have had an extreme makeover.

The top leadership in nine of the 13 offices has changed since early 2000. And car companies seek a new boss of the Alliance of Automobile Manufacturers.

The changes were not part of an orchestrated industry housecleaning. But the collective transformation of these offices is remarkable.

In Washington, a lobbyist’s clout is determined by his or her relationships with lawmakers, regulators and other lobbyists. These relationships take time to build. But automakers are shifting their legislative priorities and are bringing in new faces to press their case.

Among the current trends:

  • Many automakers are increasing their lobbying expenditures, a reversal of the companies’ cost cutting in recent years. General Motors and Nissan North America Inc. are leading the trend.
  • Import-brand companies are quietly raising their profiles in the capital as they gain market share. Volkswagen, Nissan, Toyota and Honda have expanded their operations in Washington.
  • The Big 3 no longer battle the import brands over trade issues. But automakers are maneuvering vigorously against each other on fuel economy, taxes, legal matters and employee benefit policies. Companies are defending their own special interests.

    Individual automakers often unite on industry issues such as safety. But company rivalries can slow legislation that would benefit the entire industry.

    For years, automakers lobbied Congress for consumer tax credits to promote the sale of hybrid-powered cars and trucks as well as vehicles equipped with fuel cells. But the automakers clashed over subsidies that favored a particular technology. As a result, the legislation remains tied up.

    Automakers now realize that a law’s fine print can create winners and losers, says Jim Johnston, who headed GM’s Washington office from 1976 until he retired in 1994.

    GOP links

    Many of the new leaders of automakers’ Washington offices have Republican ties. DaimlerChrysler this year gave Washington lobbyist Robert Liberatore, a Democrat, responsibility for global public policy. Then it put Tim McBride, a White House official in the first Bush administration, in charge of its Washington office.

    This year Ford Motor Co. named four new vice presidents to government relations positions. Ziad Ojakli, vice president for corporate affairs, was the current Bush administration’s former top Senate lobbyist. And Dan Brouillette, vice president of Washington affairs, was Republican staff director of the powerful House Energy and Commerce Committee.

    And it should be noted that the auto industry has a sympathetic ear in the highest levels of the White House. Andrew Card, George Bush’s chief of staff, is a former GM and industry lobbyist.

    House Majority Leader Tom DeLay, R-Texas, has urged lobbies for many industries to hire only Republicans. Despite such high-profile GOP hires, there is no evidence DeLay has exerted such direct pressure on car companies.

    The auto industry has a history of cultivating relationships with both Republicans and Democrats. That approach may prove particularly prudent this year. The presidential election is viewed as a toss-up, and some analysts say the Democrats have a chance to regain control of the Senate.

    The cost of lobbyingHere’s what automakers and their main trade groups reported spending on Washington lobbying in 2003 and 1999, the most recent comparable year in the four-year political cycle. Figures are in dollars.
    20031999Alliance of Auto. Mfrs.8.0 million2.2 millionGeneral Motors7.9 million5.8 millionFord4.6 million8.4 millionDaimlerChrysler4.5 million5.5 millionHonda2.5 million1.2 millionToyota2.4 million1.1 millionNissan2.0 million260,000Hyundai500,000no reportAIAM126,000432,000Volkswagen80,00040,000Mitsubishi60,000less than 30,000Mazdaless than 20,000less than 20,000BMW*no reportno report*BMW has a Washington office but contracts with an outside firm for all of its reportable lobbying services.Source: Reports on file with the clerk of the U.S. House of Representatives and the Secretary of the U.S. Senate

    Listening posts

    For years, most import-brand companies had little more than "listening post" operations in Washington, says Tim MacCarthy, president of the Association of International Automobile Manufacturers. Now, he says, they realize that "you make a mistake if you don’t get represented in Washington."

    Josephine Cooper, former president of the Alliance of Automobile Manufacturers, heads an enlarged Washington office of Toyota Motor North America Inc. Harland Reid, a top lawyer at Nissan North America Inc., oversees his company’s revived Washington operations.

    Blue-chip Washington lawyer David Geanacopoulos has taken over an expanded Volkswagen of America Inc. operation. He says VW is trying to integrate Washington affairs into its role as a global company.

    The goal is to treat the Washington office "as a sounding board for not only technical and regulatory matters but also for corporate strategy, corporate image matters and public affairs," Geanacopoulos says.

    Honda appointed Ed Cohen a vice president in 2000 when it expanded its Washington office.

    "As a company’s investment grows, it’s natural to expect that its Washington representation will grow as well to protect that investment," says Cohen, a Democrat.

    As the imports expand their operations, they have begun to emulate the ubiquity of Big 3 lobbyists. Says Craig Helsing, who became the first Washington vice president of BMW (US) Holdings Corp. in 1995: "It makes sense when you think about it. We are more a part of the social fabric of America now."

    The import brands also are adding lobbyists because Washington has gotten more complicated.

    A few members of Congress still are effectively elected for life. U.S. Rep. John Dingell, D-Mich., a valuable friend of the industry, is one. But the overall turnover rate among lawmakers is rising, in part because of term limits in some states.

    Congressional power is spread among more committees and subcommittees. Meanwhile, automakers are opening plants in the South. The expansion means that even more lawmakers are interested in industry issues, and lobbyists need to contact them.

    Says the AIAM’s MacCarthy: "It’s not just the old Michigan crew looking out for the Detroit Big 3 any more. It’s a bigger group of players that have huge plants in their states, like Alabama and Ohio and Tennessee and Texas and Indiana."