Automotive News - November 10, 2008 - (Page 39) NOVEMBER 10, 2008 • 39 DETROIT’S PLEA TO D.C. Industry pal, foe vie for key post in Congress David Barkholz dbarkholz@crain.com The Detroit 3’s best friend in Congress is battling one of the domestic automakers’ sharpest critics. The prize: leadership of the House committee that handles much of the legislation most important to the industry. Rep. John Dingell, D-Mich., is seeking a ninth term as chairman of the powerful House Energy and Commerce Committee. His challenger is fellow Democratic Rep. Henry Waxman of California, who has accused the Detroit 3 of contributing to global warming by resisting stricter fuel economy standards. Dingell: Longtime Waxman: Rival Michigan leader from California Dingell’s committee oversees legislation that affects corporate average fuel economy, emissions, climate change and related issues. The leadership contest “could be real divisive, when we have a new president and a chance to pull together,” says U.S. Sen. Debbie Stabenow, D-Mich., a Dingell ally. The House is expected to name its committee chairmen by Thanksgiving. A panel of House Democrats named by Speaker Nancy Pelosi, DCalif., will propose who should head each committee. Then all House Democrats will vote on those recommendations. Dingell, 82, was first elected in 1955 and is the longest-serving member of the House. An old-school arm-twister, he used his influence and procedural skills to help keep CAFE standards at 27.5 mpg for three decades. Late last year, Congress voted to raise those standards to 35 mpg by 2020. Waxman, 59, is the second-ranking Democrat on the committee. He advocates allowing California and other states to enact tougher emissions standards than those imposed by the federal government. Dingell opposes a federal waiver for states to enforce their own greenhouse gas rules. Automakers argue that state-by-state standards would create a costly checkerboard of rules. Dingell’s House district is in suburban Detroit. Waxman’s district includes Malibu, Beverly Hills and other wealthy communities around Los Angeles. Waxman is a close colleague of Pelosi. One legislative observer who asked not to be identified says Waxman probably would not be challenging Dingell without at least tacit support from Pelosi. Late last week, Dingell sent a letter to his House Democratic colleagues defending his environmental record. In an interview with a Detroit radio station, he took shots at Waxman. Dingell said Waxman “doesn’t understand and doesn’t care about industrial manufacturing in the United States, especially the auto industry.” c BAILOUT Dealers are going out of business continued from Page 1 with Pelosi, said the CEOs said they are prepared to accept limits on executive compensation and giving equity stakes in the companies to the government. Industry expects more activism from D.C. Harry Stoffer hstoffer@crain.com Dealers on board Meanwhile, dealers recommended a variety of rescue proposals. The National Automobile Dealers Association proposed tax credits for car buyers, tax deductions for auto loans, loan guarantees for dealerships and more. The American International Automobile Dealers Association, which represents import brand dealers, issued similar proposals. Minority dealers also made a plea for aid. In a letter last week to the White House, NAMAD President Damon Lester urged the president to designate minority-owned dealerships a “national economic disaster” so they could qualify for Small Business Administration disaster loans. suffering big losses. Hundreds of dealerships across the country are going out of business as sales — and credit — dry up. Last week, the National Association of Minority Automobile Dealers warned that 75 percent of its 2,100 members could go out of business by the end of the year. Unable to raise money to finance a proposed merger with Chrysler LLC, GM CEO Rick Wagoner acknowledged on Friday that he had halted negotiations with Chrysler’s owner, Cerberus Capital Management LP. GM’s cash-flow crisis was starkly outlined in its third-quarter earnings report, issued Friday. In a speech to suppliers on Wednesday, Nov. 5, Troy Clarke, president of GM North America, underlined the company’s sense of urgency when he called the next 100 days a make-or-break period for the auto industry. Falling dominoes If one or more of the Detroit 3 lurch into bankruptcy, the ripple effect would knock out many of their suppliers — and the North American assembly plants of Asian and European automakers that buy components from those suppliers. Last week the Center for Automotive Research, a consulting firm in suburban Detroit, released a study estimating that the bankruptcy of one or two of the Detroit 3 automakers would trigger the loss of nearly 240,000 automaker jobs, 795,000 supplier jobs and 1.4 million jobs in the general economy. John Wolkonowicz, an analyst for Global Insight in Lexington, Mass., questions whether suppliers could survive unscathed after a Detroit 3 bankruptcy. “If GM goes down, it will take down companies like Lear and Johnson Controls,” Wolkonowicz says. “That will shut Ford down, and it would shut down production at Toyota and Honda. They would go down like dominoes.” One supplier CEO, who asked not to be identified, said a Detroit 3 bankruptcy would be a death blow to the industry. “If GM filed for bankruptcy, … the impact would be so catastrophic that it would make the current industrial downturn look like a walk in the park.” c Harry Stoffer, Arlena Sawyers, Robert Sherefkin and Bradford Wernle contributed to this report Health care subsidy A Detroit 3 bailout could take the form of a federal subsidy for retired auto workers. Last week, the Detroit 3 CEOs and UAW President Ron Gettelfinger asked congressional leaders for $25 billion in loans for their newly created retiree health benefit trusts. After the meeting at the Capitol, Gettelfinger warned that the alternative to a federal bailout would be “lost jobs, business failures and a shortfall in pension and health care obligations — all of which will cost far more in the future than the assistance we are requesting now.” After the meeting, House Speaker Nancy Pelosi, D-Calif., declined to indicate exactly what form a bailout might take. Congressional leaders think the White House could use some of the $700 billion earmarked for bank bailouts, or the Federal Reserve could use its longstanding broad authority to make emergency loans. If the lame-duck Congress passes an economic stimulus bill, sources said it could include language directing emergency loans to the auto industry. UAW legislative director Alan Reuther, who attended the meeting WASHINGTON — How long will the honeymoon last between automakers and President-elect Barack Obama? One early indicator: Mary Nichols. Nichols, who heads the California Air Resources Board, is a top candidate to be Obama’s EPA chief. In her state job, she presided over the adoption of standards for greenhouse gas emissions that are stricter than the federal government’s. The Bush administration has refused to allow California and other states to enforce those rules. For automakers and their allies, the prospect of a change in Bush’s policy is their biggest worry in Washington after the economy. They say state rules would impede their efforts to meet tougher federal fuel economy standards and would create market chaos. During his presidential campaign, Obama said he favors the waiver. But industry executives say they think Obama will listen to their argument that a strong national climate program is better than state-by-state rules, especially amid economic turmoil. Barack Obama called the auto industry the “backbone of American manufacturing,” and he asked Congress to pass an economic stimulus package this year in a lame-duck session. JIM YOUNG/REUTERS Auto agenda During his campaign, President-elect Barack Obama took these positions on key industry issues. Let states enforce greenhouse gas rules Raise fuel economy standards beyond 35 mpg by 2020 Put national cap on greenhouse gases; charge fees to polluters Enable workers to unionize via card check Rethink free trade; renegotiate NAFTA the economy and other issues in the Obama administration. “When you are facing an economic crisis of the magnitude that we are, I think we need a more activist role” for government, McCurdy told Automotive News. Import brand automakers also look for better policymaking on industry issues, says Mike Stanton, president of the Association of International Automobile Manufacturers. The group represents 14 automakers, including Toyota, Honda and Nissan. Stanton notes that several new Democratic members of Congress elected last week are conservative “blue dogs.” He says they will help keep policies in the mainstream. c Mark Schoeff of Workforce Management contributed to this report Card check looms Another priority for auto dealers and import brand automakers is to prevent Obama and Congress from making union organizing easier. Unions expect early action on legislation that would enable a work force to organize by having a majority of employees sign cards rather than hold a secret-ballot election. That process is called “card check.” John Engler, president of the National Association of Manufacturers, says quick action on card check would undermine his group’s efforts to develop good relations with the new administration. The association includes some automakers and suppliers. “This is not the issue on which to build a relationship,” says Engler, a former Republican governor of Michigan. Mary Nichols, a candidate to head the EPA, thinks states should be able to impose their own emissions rules. When he takes office in January, Obama will work with expanded Democratic majorities in the House and Senate. But industry leaders say they think moderate policies will prevail. Obama “is a great listener,” said Dave McCurdy, president of the Alliance of Automobile Manufacturers. The alliance represents the Detroit 3, T
Table of Contents Feed for the Digital Edition of Automotive News - November 10, 2008 Life at 11 million: Slash, rethink The options: Bailout or disaster Can Toyota reheat the frozen Tundra? Chrysler dealers cheer halt to merger talk VW will unveil roadster at Detroit auto show BMW boosts dealers' year-end ad money Mercedes' $220 million flagship Mercedes hit hard in Northeast, once a sales stronghold Mercedes will kill CLK, add larger coupe, convertible Mitsubishi reclaims its finance business Toyota's Esmond to speak at congress Loss is more: Europe snatches bigger share of U.S. market Cash burn rates threaten GM, Ford GMAC: We're nobody's captive As losses mount, suppliers risk cash-flow crunch Tata: Yes to Jaguar XF derivative, no to SUV U.S. aid is needed now, but not to help Cerberus They are too big to fail Why should we help GM and Chrysler? First and foremost, you must be flexible U.S. trade policy gives it all away To the Editor: A rough ride is nothing new for autos Dealer's politics were pertinent Chrysler's 1st electric: Probably a cargo van Auto meltdown forces Mercedes to scrap prediction of sales record Boosting mpg will bump up stickers, too Adding up the tab for fuel economy Camaro Black: Eye-catching, affordable and available Honda sees green in Civic HFP's street performance Honda offers peek at future Fit Ford F-150 Raptor flies off-road Souped-up, tricked-out â and headed for the showroom Report: Toyota plans $5,000 car Amid gloom, Mazda chief sees revival in 2009-10 Report: Past-due subprime loans jump Toyota aims to win loyalty with credit card Study: Car buyers turn green for different reasons Thanks, buddy Hyundai helps Dealers Metaldyne offers pennies to bondholders Obituaries Personnel As expected, Oct. sales sank Another Chinese automaker plans Mexico factory Honda backs off U.S. clean diesels Industry pal, foe vie for key post in Congress Industry expects more activism from D.C. N.A. output falls 19.9% Toyota moves in striking distance of GM's U.S. sales crown Going, going . . . An ex-GM exec's view: It's going to get nasty Sex, Nazis, chicken and BMW: A scandal that puts fiction writers to shame Recession rips up roadster market Toyota takes heat for 'the herpes of the advertising world' Want to boost mpg? Turn up the heat on AC Cutting energy loss: A nibble here, a nibble there ... Carbon slashes weight, but it's still too pricey Carmakers shift to gears in search of mpg gains Natural gas draws interest as alternative fuel Friction? Ay, there's the rub Electric for a week Automotive News - November 10, 2008 Automotive News - November 10, 2008 - (Page Intro) Automotive News - November 10, 2008 - (Page Bellyband1) Automotive News - November 10, 2008 - (Page Bellyband2) Automotive News - November 10, 2008 - The options: Bailout or disaster (Page 1) Automotive News - November 10, 2008 - The options: Bailout or disaster (Page 2) Automotive News - November 10, 2008 - VW will unveil roadster at Detroit auto show (Page 3) Automotive News - November 10, 2008 - Mercedes hit hard in Northeast, once a sales stronghold (Page 4) Automotive News - November 10, 2008 - Mercedes hit hard in Northeast, once a sales stronghold (Page 5) Automotive News - November 10, 2008 - Loss is more: Europe snatches bigger share of U.S. market (Page 6) Automotive News - November 10, 2008 - Loss is more: Europe snatches bigger share of U.S. market (Page 7) Automotive News - November 10, 2008 - As losses mount, suppliers risk cash-flow crunch (Page 8) Automotive News - November 10, 2008 - As losses mount, suppliers risk cash-flow crunch (Page 9) Automotive News - November 10, 2008 - Tata: Yes to Jaguar XF derivative, no to SUV (Page 10) Automotive News - November 10, 2008 - Tata: Yes to Jaguar XF derivative, no to SUV (Page 11) Automotive News - November 10, 2008 - First and foremost, you must be flexible (Page 12) Automotive News - November 10, 2008 - First and foremost, you must be flexible (Page 13) Automotive News - November 10, 2008 - Dealer's politics were pertinent (Page 14) Automotive News - November 10, 2008 - Dealer's politics were pertinent (Page 15) Automotive News - November 10, 2008 - Auto meltdown forces Mercedes to scrap prediction of sales record (Page 16) Automotive News - November 10, 2008 - Boosting mpg will bump up stickers, too (Page 17) Automotive News - November 10, 2008 - Boosting mpg will bump up stickers, too (Page 18) Automotive News - November 10, 2008 - Boosting mpg will bump up stickers, too (Page 19) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 20) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 21) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22a) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22b) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22c) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22d) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22e) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22f) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22g) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22h) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22i) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22j) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22k) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22l) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 23) Automotive News - November 10, 2008 - Souped-up, tricked-out â and headed for the showroom (Page 24) Automotive News - November 10, 2008 - Amid gloom, Mazda chief sees revival in 2009-10 (Page 25) Automotive News - November 10, 2008 - Toyota aims to win loyalty with credit card (Page 26) Automotive News - November 10, 2008 - Hyundai helps (Page 27) Automotive News - November 10, 2008 - Dealers (Page 28) Automotive News - November 10, 2008 - Personnel (Page 29) Automotive News - November 10, 2008 - Personnel (Page 30) Automotive News - November 10, 2008 - Personnel (Page 31) Automotive News - November 10, 2008 - Personnel (Page 32) Automotive News - November 10, 2008 - Personnel (Page 33) Automotive News - November 10, 2008 - Personnel (Page 34) Automotive News - November 10, 2008 - Personnel (Page 35) Automotive News - November 10, 2008 - Personnel (Page 36) Automotive News - November 10, 2008 - As expected, Oct. sales sank (Page 37) Automotive News - November 10, 2008 - Honda backs off U.S. clean diesels (Page 38) Automotive News - November 10, 2008 - Industry expects more activism from D.C. (Page 39) Automotive News - November 10, 2008 - Industry expects more activism from D.C. (Page 40) Automotive News - November 10, 2008 - N.A. output falls 19.9% (Page 41) Automotive News - November 10, 2008 - Toyota takes heat for 'the herpes of the advertising world' (Page 42) Automotive News - November 10, 2008 - Toyota takes heat for 'the herpes of the advertising world' (Page 43) Automotive News - November 10, 2008 - Toyota takes heat for 'the herpes of the advertising world' (Page 44)
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