Auto Bailout Is Local Issue, Dealers Plead

Trickle Down Trauma Of Potential Industry Collapse Prompts Salesmen To Lobby Lawmakers

(CBS/ AP)  Hayden Elder's beaver pelt cowboy hat delivered his message to lawmakers as starkly as anything else did: The proposed $25 billion federal loan to keep the U.S. auto industry breathing is a local issue.

Elder, who sells Chryslers, Dodges and Jeeps in Athens, Texas, is part of a posse of several dozen dealers from across the country blanketing congressional offices this week. They want legislators to view the plan not as a bailout of Detroit's Big Three automakers - not a popular sell with the whole country hurting - but a way to prevent pillars of thousands of local communities from crumbling.

"What happens to the local church? Who gives to the food pantry?" said Elder of his dealership's contributions, which go beyond jobs and local taxes to the rodeos he stages to benefit disease research and the local Chamber of Commerce. "We're talking about Main Street, USA."

The dealers' lobbying underscores how the auto industry has launched an all-out effort for the rescue package, which seems stalled under opposition from President George W. Bush and congressional Republicans. Opponents say the auto companies have only themselves to blame for incurring excessive costs and lagging behind foreign manufacturers, and express fears about what federal aid to them might mean.

"I have serious concerns if you open the door for one industry, how do you close it for another," said Sen. Johnny Isakson, R-Ga., who said he was telephoned by General Motors chief executive Rick Wagoner.

Dealers like Elder are the infantry in the industry's effort to sway Congress. Bailey Wood, spokesman for the National Automobile Dealers Association, said about 50 are in town this week, out of his group's 19,700 foreign and domestic franchised auto dealers - about 90 percent of the nation's total.

On Wednesday, the CEOs of General Motors, Ford and Chrysler are pressing their case for the bailout before the House Financial Services Committee, a day after sometimes confrontational testimony before a Senate panel.

Tuesday also saw the industry's generals on Capitol Hill, as Wagoner and the chiefs of Chrysler LLC and Ford told the Senate Banking Committee the stability of the nation's economy was at stake.

Like other industries, the big auto companies also rely on cash to get their message through.

In the first nine months of 2008, auto interests - including manufacturers and dealers - spent just under $50 million for federal lobbying. That ranked in the top 20 among all industries, according to the Center for Responsive Politics, a nonpartisan group that tracks such expenditures.

The auto industry and its employees spent another $15 million on campaign contributions to federal candidates and parties in 2007 and 2008, ranking 28th among more than 80 industries, according to the center.

While the CEOs drew most attention Tuesday, the auto dealers methodically - and sometimes not so methodically - filtered through the hallways of the Capitol and its adjacent office buildings.

One lobbying team showed up Tuesday at the office of Sen. Robert Byrd, D-W.Va., only to learn the meeting was scheduled for Wednesday.

But luck has a way of evening out. At one point, David Kelleher, with Chrysler-Jeep-Dodge dealerships in Philadelphia and Glen Mills, Pa., entered the Capitol and bumped right into Sen. Bob Casey, D-Pa., in a basement hallway.

"Do you know how bad it is on the floors right now?" Kelleher told him, referring to how slowly cars are moving out of showrooms. "This thing is just frozen."

"We've got to try to do something. It's the right thing to do," Casey replied.

Minutes later, Chuck Eddy got a private audience with Sen. Sherrod Brown, D-Ohio, and also emphasized the local angle.

"I'm not here representing the Big Three," said Eddy, a dealer from Youngstown, Ohio, previewing his argument with Brown. "But we have to keep them alive to keep us alive."

Brown was already a staunch supporter of the proposed loan but said later that his time with Eddy was helpful.

"He represents what's happening to dealers all over this country," said Brown. "He helps strengthen my argument."

Not all were so receptive. One lawmaker Elder met Tuesday, Rep. Jeb Hensarling, R-Texas, said afterward he wasn't convinced the $25 billion would solve the automakers' problems.

"I drove to work this morning in a '98 Jeep Cherokee" made by Chrysler, he said. "I like it, but clearly a lot of Americans don't like these products."

Most dealers in town this week sell Chryslers. The manufacturer covered their expenses by agreeing to hold a company-paid quarterly meeting of the group in Washington instead of Detroit, said Stuart Schorr, a Chrysler spokesman.

Ford spokesman Mike Moran said his company had e-mailed employees and dealers encouraging them to contact their senators and representatives.

Also in the Capitol Tuesday were mayors of Shreveport, La., Arlington, Texas, and other communities to urge passage of the rescue package.

"If we expect people to live in a community with decent services, we cannot provide it if we lose this revenue," said Karen Majewski, mayor of Hamtramck, Mich. "We're talking about the lifeblood of our city."

Approval of the $25 billion seems unlikely until next year, when the odds will improve under new President Barack Obama and stronger Democratic majorities in the House and Senate.

[slim1h2o]

I don''t feel very sorry for the dealerships either. With their overly inflated prices. I know a lady that took her Jeep to the dealership gor routine maint. They changed all the fluids, thats it, and walked away with a $1500.00 bill.

True story.........

[slim1h2o]

correction;

I don''''t feel very sorry for the dealerships either. With their overly inflated prices. I know a lady that took her Jeep to the dealership for routine maint. They changed all the fluids, thats it, and walked away with a $1500.00 bill.

True story.........

[hitoyou1]

Let this guy take his hat and go back to Texas/ Who cares. If the dealer did not jack the cost up so high, so they could become rich, maybe they would not be begging for money. Let them go down, Fast. By By, you made it happen, you live with it.

[observer2020]

I saw on the news this morning that these guys arrived in Washington to beg for money in their private jets with limos waiting for them. How much money did that cost? Also, I heard that one of the beggars was paid over $25M last year. Seems like they''re really worried.

[lilly1232]

you people just dont get it, this does not just affect the auto industry. Have you ever heard of the trickle down effect? well thats what will happen here. If people dont have jobs they dont buy, if they dont but the business commuity dont sell. if they dont sell they close, more job losses. Even you sould get that, thats what we were told in the Regan administration. Remember? dont be so hasty to complain about the texan that arrivied in his jet, at least he sees what will happen if the auto industry fails, and he does help the people where he lives. Would you, or would you just say to hell with them?

[lilly1232]

oh and one more thing, that is the biggest problem this country has, we care about no one but ourselves. And as you can see this is what happens when people only think of themselves

[slim1h2o]

And as you can see this is what happens when people only think of themselves

Posted by lilly1232 at 01:03 PM : Nov 19, 2008

And that''s why they must fail. They have for too long, have thought only themselves and their bottom line.

How is it that the auto industry uses 50 mil, just to ask for money.

Don''t you think they should invest that money back into their business? Maybe come with a viable electric car?

I do....

[rdgjess]

The auto industry needs to blame the media for their problems. For months the media has been telling us how banks are tightening up and approving fewer home/auto loans. (I heard one story that said only 10-15% of the population would qualify for a auto loan.) That explains why no one''s buying a new car.....we were told we wouldn''t qualify. See what happens when you try to govern with fear?!?

[slim1h2o]

Posted by rdgjess at 01:11 PM : Nov 19, 2008

A lot of people are in fear of losing their jobs too. So are not making large and expensive purchases.

That''s just another stumbling block for our economy.
It''s known as the rippling affect.

[bks59]

...(I heard one story that said only 10-15% of the population would qualify for a auto loan.)...

--------------------------------------------------------------------------------

Posted by rdgjess at 01:11 PM : Nov 19, 2008


and 10-15% of car buyers pay cash!

[grannie571]

Being a tax payer I say GET REAL. We have lost our company which was a 18-wheeler. Did the tax payer come to us and bail us out. Answer Hell No. Do like the rest of us cut your spending. Hire me I will help you. Start with a budget plus sell your jet and fly like the rest that can afford it commerical. Cut your pay because it is far out of line. You can be replaced.

[hitoyou1]

The auto companies need to BLAME them self. No one else. It is there dumb aaaasssssssssssssssss that got them into the mess. They make junk and the peopel will no longer buy it.

[hitoyou1]

trickle down effect, yes some idiot try to sell it the people , his name was dumb AAAASSS Ronald Reagan the idiot. It did not sell then, it wont sell now.

[sebastian27-2009]

I can''t sympathize much with the whole industry: manufacturers, dealers, or factory workers. For years the manufacturers found out what unions wanted, agreed and signed the labor contracts, and raised the prices of the products accordingly.
HOWEVER, I don''t think that now is the time to let them sink. The president should call a conference of the industry and labor representatives and not let them leave until an accord is worked out on new labor contracts. Also, non-union workers should be advised by the representatives that they can either agree to wage or salary cuts in line with other industries or find new jobs. The executives should defer any bunuses until the companies can show a profit.

[king_daniel_]

if the auto swine created better cars with less dependancy on oil and gas and less smog for us to smoke they would sell more cars worldwide...however they opted to jump in bed with the oil companies.....with designs that get worse mileage than tanks.....our government shouldn''''t bail them out....haliburton should...since it was them that paid the board to say that 14 miles a gallon is as good as it gets.....i hope they all lose their jobs and a company thats not in an orgy with the conspiracy artists comes to power with something that applies technology under the hood where it should be...there was a crack head in texas that took parts from his refrigerater and was getting sixty miles a gallon....there is a man in oklahoma, named steven myers i believe, that has a steam engine he built in his garage that is amazing, find it on youtube.... if an average person can make a million dollar design look stupid; it only makes sense they can''''t make any money.....

[VegasResident]

Apparently the heads of all three automakers arrived in DC for their testimony in PRIVATE JETS. Estimated to cost $20,000 round trip they made no apologies. One company issued a statement that it was about the safety of their executives. Gee, first of all no one owuld recognize them in an airport and second, why do they think a commercial jet will crash more? More private planes crash every year than commercial.

So here we have it folks, like the AIG party. The Big 3 arrive in their luxury jets asking for cash because they cannot figure out how to cut costs.

[mytoosense]

I don''t understand this belly aching about overpaid auto workers. The American economy is finally reacting to the decade long erosion of middle class wages in America due to the shipping of millions of union and non-union manufacturing jobs to Mexico and China, the shipping of high tech jobs to Japan and India and the domestic use of cheap illegal-alien labor.

Anyone who complains about overpaid middle class workers AND the current state of the economy are pissing up river and complaining about the taste of the water.

[mytoosense]

Ford Motor Company has a small fleet of jets, some the size of a DC9, that are used to commute Ford workers and Ford suppliers between Ford Plants around the country and the world. The have their own hanger/terminal at Detroit Metro.
Some of these auto workers commute up to twice a week on these jets. The passengers are Ford managers, engineers, maintenance people, and Ford suppliers who has scheduled business at a Ford plant.

Luxurious? I got a free cup of coffee when flying with them. I think I also had a little more leg room than commercial but not much more.

[vmcneal2]

The "current" crop of American cars are a good as any Toyota or Honda and they are more reliable than BMW, Mercedes, or Audi. The cars or not the problem. The problem is that these American car companies are big, fat, arrogant, giants that don''t have a clue how to market their products.

[hitoyou1]

The UAW is over paid, and don''t know how to spell work, let alone know how to work. Put them all on the STREET.

[4marlene]

Let''s see. Oil companies post record profits. The big 3 auto makers plead for $25 billion. It doesn''t take a rocket scientist to figure out who should be ''lending'' $25 billion or more to them. Why plead to the government? Take the begging to Exxon and Chevron! It would be in their best interest, don''t ya think? If the auto industry fails, refineries will suffer.

[lmartink]

My local dealers are pretty much scumbags. If we baiout Detroit, we should still get rid of these predatory losers.

[catlady1412]

While I would hate to see those very smug CEOs get their bailout, I definitely will see the impact here in KC if this does not pass. We have a couple of auto factories around here. We also have the delightfully tanking Sprint mess here too. Can''t anybody run a company anymore?

[cheetah-man7]

As much as I cringe at the thought of giving the Big 3 a $25B bailout/loan, I also think we could perhaps make it happen to OUR advantage... How about we give them the money with the proviso that they MUST develop new cars which ALL get over 50 MPG ? How about no more jet-flying around? I think the USA is in a position to negotiate to our advantage for a change. Make Exxon/Mobil and others pitch in to help develop these new and improved cars. To the poster who believes that the current US cars are equally as good as Toyota and Honda I can only say: What color is the sky in YOUR world? NO cars made in the USA are comparible to any Toyota or Honda made. The USA is sadly behind in that regard.

[tonykim42]

Steve Kroft, CBS News did not ask Obama how $150,000,000.00 donation from UAW to Obama%u2019s election
helped the big 3 auto industries to avoid their bankruptcy: The executives of 3 big auto industries have been
mismanaging their extreme resources last 30 years just like Obama had been taking
advantage of the honorable Federal Student Loan System till he decided to run for the presidency!

Neither Steve Kroft, CBS News did ask Obama how Obama%u2019s life time taking
advantage of the honorable Federal Student Loan System helped the executives of Fannie
Mae & Freddie Mac, Lehman Brothers, Bear Sterns and AIG to avoid their taking advantage
of the Washington for the duration of their organizations!

Nor Steve Kroft, CBS News did remind Obama how %u201CThe drop hollows the stone,
not by its force, but by its frequency%u201D.

[cheetah-man7]

Leave it to bitter Republicans to blame it all on Obama. You only have yourselves to blame for this mess. Thank you, Republicans!