Carmakers Lobbying as They Get Bailout Money
Wednesday, March 11, 2009
General Motors and Chrysler continue to spend millions of dollars on lobbying the same government that is loaning them billions of dollars, as they appeal for more money and seek to influence federal rule-making.
In the last three months of 2008, just as slumping auto sales pushed the two Detroit carmakers closer to bankruptcy, GM spent about $3.9 million on lobbying, according to a review of its most recent disclosure forms. Chrysler and its parent company, Cerberus Capital Management, reported spending about $3.4 million.
The companies said they lobbied for industry bailout bills in the House and Senate, as well as a sweeping list of legislative and regulatory issues, including vehicle emissions standards, air bag systems, hydrogen fuel safety and climate change.
The reports, which must be filed quarterly, do not detail the exact amounts spent on specific issues, drawing questions from some critics about whether they are using the loans to lobby against the taxpayers' interest.
"There's not enough transparency in the bailout program to know what they're using the money for," said Ed Mierzwinski, consumer program director at the U.S. Public Interest Research Group, an advocacy organization. "Using government money to lobby against consumer and environmental protections is wrong."
To some analysts, it's a self-perpetuating cycle: The more the government bails out corporations, the more it must get involved in their operations, requiring the companies to spend even more on lobbying.
The automakers say the lobbying simply reflects their role in the American economy. While GM lobbyists targeted legislation for an auto bailout program, they also focused health care, whose rising costs have increased the company's retiree benefit expenditures.
"There is significant, ongoing demand from legislators and government officials for education and information on Chrysler, its operations, products and future plans, including promoting advanced technology that responds to the nation's energy needs," said Chrysler spokeswoman Linda Becker. "The expenses reported included a number of activities at the local, state and federal levels of government on a wide range of issues."
GM and Chrysler are not the only automakers to spend big bucks on influencing government decisions. In the same period last year, Ford, which has not asked for federal bailout funds, spent about $2.3 million on lobbying.
And Detroit's biggest foreign rivals, which have also suffered from lower auto sales, have made sure to have their voices heard. Toyota spent about $1.3 million over the three-month period, and Honda spent about $945,000.
This month, the industry's formidable lobbying corps were gearing up for the Environmental Protection Agency's review of California's strict vehicle emissions standards. For years, many firms have fought state efforts to boost fuel-economy requirements, arguing instead for a single national standard. Last year, they won the battle. But within his first days in office President Obama revived the debate, directing the EPA to reconsider California's request. This month, the EPA held its first public hearing on the issue.
The difference now is that GM and Chrysler are lobbying on the issue at the same time they are seeking $21.6 billion in additional loans.
"It is probably the most heavily regulated industry in the country," GM spokesman Greg Martin said. "Lobbying is legally protected speech. It's a transparent, effective way for us to have a voice in multiple policy issues that impact our business and employees.
Martin added, "Companies should not be required to forfeit their legal rights if they receive federal funding."