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Automakers Are Lining Up Aid, But Just Don't Call It a Bailout
U.S. carmakers also want to persuade the Bush administration to push harder to get the Japanese to raise the value of their currency. The manufacturers assert that Japanese cars sell for thousands of dollars less than they should in this country because the Japanese government unfairly intervenes in currency markets to artificially depress the yen. The Bush administration rejects claims that the Japanese government is manipulating exchange rates.
"We can compete with Toyota, but we can't compete with Japan," William Ford said.
In addition, the companies advocate tougher trade policies that would restrict the import of foreign cars into the United States where possible and would ease entry of U.S.-made cars into other countries. "We could sell plenty [of cars] in Japan if we were allowed to," Sen. Levin said. "We need a president to go after the Japanese to tell them if they don't reduce their barriers that they will find similar barriers to theirs" in the United States.
The car companies are working through several industry coalitions and major trade groups, such as the National Association of Manufacturers, to press their case on various issues. Not all parts of the proposals are likely to move at the same time, auto executives say, but they see an urgent need for at least some assistance efforts to move soon.
Beset by falling sales and rising health care and pension costs, GM and Ford have suffered through a tough year. GM, the world's largest automaker, said last month that it would cut 30,000 jobs and close all or part of 12 facilities. Ford, No. 2 in the United States, plans to announce its own closings and job cuts next month. In figures released last week, both auto giants reported that their November sales dropped, as sales of Toyota and Honda vehicles continued to rise.
One reason the car companies are not pressing for a single infusion of money is that their problems would not be solved by such a benefit. "Their problem is not so much cash flow to get them through a crisis," said Rep. Dale E. Kildee (D-Mich.), who has been a leader in devising relief efforts. "It's more of a structural change in the global automotive market that the auto companies and the auto-parts makers need to cope with."
The assistance that is being sought would address only some of the companies' problems, which range from inefficient factories to consumer preferences for foreign-built cars. Auto executives acknowledge that recovery will depend on their ability to resolve such issues.
Senators and House members have been meeting privately among themselves and with auto company executives for weeks and expect to have further planning sessions. Much of what they will ask for is part of an effort in general to revive what has been a floundering manufacturing sector.
"What we would be doing is common sense -- fighting for a manufacturing base for this country," Levin said. "We have to decide if we want to have manufacturing jobs or [if] we want to put up with losing millions of more jobs."
Michigan's congressional delegation has led the effort to aid the industry, but lawmakers from many other states may be sympathetic: Cars and their parts are made in many areas of the country. The auto industry is directly or indirectly responsible for 13.3 million jobs nationwide, according to a report by the University of Michigan and the Center for Automotive Research, although that includes the U.S. operations of foreign automakers.
Republican lawmakers from regions affected by the auto company retrenchment are joining the drive. Rep. John J.H. "Joe" Schwarz, a freshman Republican from Michigan, has been working on a universal health care plan modeled on federal employees' benefits that potentially would help GM, Ford and DaimlerChrysler unload billions of dollars in annual health care costs for current workers and retirees. "It is wrong to destroy the middle-class dream in America," Schwarz said. "We are going to have to find a way as a country to work our way through this."
But it's not clear how united the industry is. For example, GM cares more about pensions than Chrysler because Chrysler, as a smaller company, has far fewer retirees. The industry's big trade group, the Alliance of Automobile Manufacturers, has also been on the sidelines because it focuses mainly on trade and safety issues and represents foreign-owned car companies as well the U.S. automakers.
"There's no umbrella group," said Alan Reuther, the legislative director of the United Auto Workers union. "It's not like we all have the same talking points and it's all lockstep on things like relief for the industry."
Even the Michigan delegation has had its tensions. In mid-November, members of the delegation met at the Capitol to discuss auto industry issues with Michigan Gov. Jennifer M. Granholm (D). The meeting was stalled as Republicans and Democrats battled over Republican Rep. Candice S. Miller's attempt to open the meeting to reporters. Democrats said opening the meeting was an attempt by Republicans to embarrass Granholm, who is up for re-election next year. Once the doors were closed and members cooled off, however, the participants began to work together.
But what they discussed, participants insisted, was not a bailout.