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Big Three carmakers line up for another bailout

(Agencies)
Updated: 2008-11-14 20:09

WASHINGTON -- All aboard, there may be another bailout train leaving the station on Capitol Hill. Talk of a $25 billion emergency loan package for the Big Three carmakers that could see a vote in a postelection session of Congress next week has a wave of business lobbyists clamoring for action -- and a slice of the pie.

US flags flutter in the wind in front of the General Motors Corp headquarters in Detroit, Michigan in this November 7, 2008 file photo. [Agencies]

They're dusting off their call lists and preparing for a furious round of vote-hunting that comes little more than a month after lawmakers approved the $700 billion bailout designed for banks and other financial firms.

Now with the three major US car companies warning they could face a collapse before year's end without new government help, Democratic congressional leaders are pushing to carve out a portion of the financial rescue money for them.

It's far from certain the package will become law -- or even see a vote. Republicans and President George W. Bush are reluctant to send new money to the carmakers, saying they should instead speed distribution of a $25 billion loan package Congress approved in September to help automakers develop fuel-efficient vehicles.

Senate Majority Leader Harry Reid, D-Nev., plans a vote next week on the package, but House Speaker Nancy Pelosi, D-Calif., a leading proponent of additional action to help the Detroit auto companies, has yet to schedule one, as leaders continue to hunt for the support to pass it.

Senate Republicans hold the key. Supporters of the auto industry bailout are hopeful they can snag 12 to 15 of them to join with Democrats in pushing through the carmaker bailout. They're targeting lawmakers who represent states with auto plants and auto suppliers.

That's where the business groups come in.

General Motors Corp., Ford Motor Co., and Chrysler LLC, along with the United Auto Workers union, have clamored for the aid for weeks.

But strategists in both parties say it's pressure from the thousands of dealerships across the country -- in every state and congressional district -- that is most likely to sway lawmakers in both parties. Auto dealers have hefty political clout that could bring crucial support for the package.

They'd like just a little something in return.

The National Automobile Dealers Association is urging that their sector get a slice of any additional help for car manufacturers.

"That legislation needs to operate to ensure the presence and the viability of the dealer network. The two go hand-in-hand. You can't have one without the other," said Andy Koblenz, an association executive.

The group also wants Congress to approve new tax breaks for buying cars and trucks. Once the final auto bailout bill emerges, the group is ready to unleash a barrage of anxious car dealers to pressure lawmakers to back it.

"We've put them on a high state of readiness," Koblenz said. "We're expecting to activate that network within the next few days."

Such requests will turn up the heat on Republicans and Democrats alike. Many lawmakers who initially opposed the $700 billion financial industry rescue package last month reversed course and backed it after hearing from local businesses in their area, particularly the car dealers.

Bruce Josten, top lobbyist for the US Chamber of Commerce, said the group is using its considerable muscle to round up support for automaker aid.

"They're in a tailspin -- it is like the perfect storm," Josten said of the auto firms. Dealers' involvement in the lobbying effort can bring "a lot of heat" on lawmakers, he added. And because the Big Three are the largest purchasers of domestic steel, aluminum, glass and computer chips, among other things, their woes will likely be felt by all 535 members of Congress.

"It's a very long tail," Josten said.

The companies that supply the materials that go into cars, which employ about 800,000 workers in the United States, say they should get a piece of any new emergency loan package from the government.

The auto supply industry has a large manufacturing presence in states such as Indiana, Kentucky, Michigan, Missouri, Ohio, and Tennessee.

"We are all connected by some very thin threads and if any piece of the chain from the manufacturers to the small suppliers fails, the whole thing could fail," said Ann Wilson of the Motor & Equipment Manufacturers Association.

Their argument already seems to be working.

Republican Sen. George Voinovich of Ohio, who co-chairs the Senate Auto Caucus, said through a spokesman Thursday that he would support using bailout money to assist the companies because "helping the automakers remain viable is truly putting Main Street over Wall Street."

And Sen. Kit Bond, R-Mo., also says he's open to the idea.

"While I have real concerns with another taxpayer-funded bailout, there are also thousands of workers in Missouri whose jobs are on the line so the devil will be in the details," Bond said in a statement.