Presidential campaign shifts help for auto industry into neutral

WASHINGTON — Despite the auto industry's tough week, with General Motors announcing four truck plant closings and oil prices soaring again, neither Congress nor the White House appears likely to offer automakers any more help this year.

Presidential and congressional elections are now only five months off, noted Charles Territo, spokesman for the Alliance of Automobile Manufacturers. "As we get closer to November, the window of opportunity for major legislation will diminish," he said.

The industry's troubles have been building for some time. Last November, the chief executives of Ford, GM and Chrysler met with President Bush to seek help on fuel efficiency standards, trade agreements, currency imbalances and health care costs.

Since then, the industry has had some policy successes.

In December, Congress approved legislation that requires energy companies to add 36 billion gallons of renewable biofuels to the gasoline supply by 2020.

And last month, the White House, giving in to congressional pressure, agreed to stop filling the U.S. Strategic Petroleum Reserve, the world's largest stockpile of government-owned emergency crude. The hope is that without the government purchasing about 70,000 barrels of oil per day, gasoline prices might drift lower.

In November, the automakers also wanted the administration and Congress to pressure Asian countries into raising the value of their currencies to make U.S. imports cheaper. Both lawmakers and Bush officials pressed Asian leaders on the issue, and as a result, the Japanese yen, Chinese yuan and other Asian currencies have strengthened against the dollar.

"It was a change of tone that we sought, and got" from U.S. leaders when dealing with their Asian counterparts on currency problems, said Stephen Collins, president of the Automotive Trade Policy Council, a group representing U.S. automakers.

But the auto industry has had policy failures, too. For example, the industry also wanted the Bush administration to rewrite a trade agreement with South Korea, forcing that Asian nation to welcome more U.S. vehicles.

The administration dismissed those arguments and refused to alter the agreement. The Democratic-led Congress made it clear it would not approve the South Korea pact without the auto-related changes, so Bush has not submitted the treaty to Congress for approval.

Perhaps the most important public policy issue for the industry involves health care. With 1.1 million employees, retirees and their dependents, GM alone is the nation's largest private provider of health care. When they met with the president, the auto executives said they needed congressional help to hold down businesses' costs on so-called catastrophic coverage.

But Territo said that no matter how bad the industry's financial outlook gets this year, Congress will not pass health care reform.

Any solutions will have to wait until a new president and new Congress have taken office in January, he said.

Laid-off autoworkers also may have to wait until next year for help. In March, the House passed a resolution to expand the Trade Adjustment Assistance program, which offers training to workers who have been dislocated because of trade, and to increase the eligibility for unemployment insurance.

In a statement Friday, the Bush administration said it was "committed to continue working with Congress to reauthorize and improve" the program. But the Senate has not acted, and Congress may not complete the legislation this year.

With Midwestern states shaping up as an important campaign battleground this fall, the candidates are outlining how they'd respond to the auto industry's decline.

Democrat Barack Obama got off on the wrong foot with many autoworkers in May 2007, when he told the Detroit Economic Club that the industry had failed to effectively compete with foreign auto makers. The candidate disparaged his old Ford as a "tin can."

But when he returned to Michigan last month, Obama reached out to the industry.

He told more than 200 people at a town meeting in Warren that he wanted to invest billions to help the auto industry become more competitive, according to news reports. He proposed incentives to develop more fuel-efficient cars; grants for manufacturers to convert to cleaner technologies, and $100 million a year for the research and development of technological advances in manufacturing.

Republican John McCain, in a Detroit speech last October, told autoworkers that "it isn't government's job to spend billions preserving products and services that we can't sell any more," according to news reports. "But it is government's job to help workers get the education and training they need for the new jobs that will be created by new businesses in this new century."

For older workers, McCain suggested providing either re-training or a financial supplement as they get back into the work force.