Big Three Spent Big On Congress Among Its Budget Choices

The newest critique of the automobile industry came yesterday when members of Congress, weighing the idea of offering the Big Three a $25 billion loan, mocked the idea that the executives of these companies had traveled to the Hill on corporate jets.

Why should the Congress give the struggling companies a bailout if their executives can't even show a modicum of financial prudence?

The argument is a sensible one. But it leaves out an interesting side note: much of what the automobile industry has been spending its cash on includes efforts to ingratiate itself with the very lawmakers it now needs. A look a congressional travel data shows that between 2005 and 2007, the Big Three car companies -- Ford, GM, and Chrysler -- as well as a trade association that represents all three, spent more than $35,000 on trips for members of Congress and their aides. The majority, if not all, were fact-finding missions. But the cost of some of the excursions ($3,066 for Rep. Marsha Blackburn and her husband to go from Nashville to Detroit and back) suggests that corporate jets were involved.

Where these, too, poor efforts in money management?

Taken as a whole, the $35,000 represents pennies when compared to the amount the industry has spent on lobbying. According to the Center for Responsive Politics, in the past year alone "DaimlerChrysler has spent $5.3 million on federal lobbying, GM has spent $10 million and Ford has spent $5.8 million." The Alliance of Automobile Manufacturers, meanwhile, has forked over nearly $5 million in lobbying fees.

"The automakers and car dealers are among the biggest spenders in lobbying and have invested in a government relations strategy for many years," said Massie Ritsch, a spokesperson for CRP. "[As with congressional travel] the are doing their best to put themselves in places where lawmakers can see their business."

These expenses, as the companies would argue, are necessities for an industry so heavily reliant on government support. Certainly shepherding a member of Congress around on a corporate jet is different than using that corporate jet to bring executives to-and-from Washington for congressional hearings -- especially when that executive is coming to beg for a bailout. And in the end, they may be effective in persuading Congress to help pass the $25 billion loan. Early Thursday afternoon, word spread that Republicans and Democrats had reached a deal on appropriating money to the struggling industry.

UPDATE: For more on the auto industry -- in this case, its waning influence -- read another Center for Responsive Politics report: here.

Comments

[lmvd3]

When are these fat cats going to realize that the days of ostentatious, money-grubbing, self-absorbed greed are OVER?!? We don't care if the auto makers go out of business, because they are so incredibly mis-managed they should not be in business. They've had their hands out for far too long, and their entire identity STILL rests on muscle cars and giant gas-guzzling SUV's, despite overwhelming mass exodus of consumers to smaller, fuel-efficient, reasonably-priced cars. No one can stay in business if they don't provide a product that people want---Business 101. WHEN WILL THEY GET IT?!? I guess only when they lose their obnoxious luxury jets and join the other auto-workers in the unemployment lines.

[MickeyWhite]

Marsha Blackburn is my Congressman.
She is no conservative.
See her unconstitutional votes at :
http://bluecollarrepublican.com/blog/?p=614
Mickey
Rossville TN

[rosiebond007]

ONE OF THESE 3 IS BUILDING A $300 MILLION SUV MANUFACTURING PLANT

IN

RUSSIA

Our money would probably go to finance more of that - jobs going overseas -

[303]

In addition to being Billions short, Detroit is several DECADES LATE. No amount of lobbying or psuedo-patriotism can trump the fact that they, along with the unions and gas-guzzling/enabling Congress, have driven themselves off the cliff. Thy have repeatedly chosen short-term sales and token belt-tightening over longterm re-engineering and sustainability. They expend AS IF to sell over 17 million cars/year in US; yet, there is NO WAY they will even hit 12 mil the next few years. The overcapacity--and the fact that they have such excessive contractual overhead that must be paid whether they sell ten or ten million autos-- is KILLING them, and will kill anyone else who tries to backstop this dinosaur. Spin-off a few of the viable, energy-effecient lines with re-worked worker/dealer contracts and fire sale the rest to benefit legacy costs. Re-rationalize the entire automotive/transport industry. Re-vamp/re-tool existing plants to produce 21st century vehicles, using polymers instead of steel, for example. Support cottage industries to retrofit existing vehicles for gas, or hybrid. There is so much that can be done to (1) create good jobs here in America, AND (2) improve fuel comsumption. This is needed not only to save our economy, but our environment as well; PLUS reduce our over-dependence on imported fuel. We're in a HUGE mess. We need massive Changes. We must think outside the box, and act for the Greater Good of ALL Americans.

[idid2cu]

Not only do the big three need to buckle down and regroup the company. Prove to the House and Senate that they have a plan .

They also need to improve on customer service. I had super problems with them on a transmission and wanted to get it resolve. All the prompts you go through is ridiculous. What happen to humans answering the darn phone?

Customer service is a part of the problem that will drive customers away. My money is not chump change and I am important. But I was treated as not. This is a big expense and want the problem fixed. I kept calling, never return my call. . How I solved the problem? Traded it in for a foreign, best thing I ever done. . Had a small problem, called them, they fixed the problem right away and kept calling to make sure I was satified.

That is what I call taking care of business. Minor or huge at least the call was returned in a timely fashion.

All Big 3 need to make some major improvements in this area.

[Rex11]

Blah, blah, blah.
Once again the Dems are all bite and no bark. They will give the automakers what they want... Just like the way they gave LIEberman his chairmanship, continued to give Bush his war, passed the FISA bill, passed the bank bailout, took impeachment off the table, did not prosecute or imprison Rove, Miers, and the others for contempt, Supreme Court confirmations, and the list goes on.
It is high time to find some bold and effective replacements for these entrenched, useless Dems in 2010. Reid, Pelosi, Lieberman, Feinstein, Dodd, Frank, Schumer, Levin, etc. must never be allowed to steal our money again. It's great we have a majority in the House and Senate, but a majority of spineless wimps does not help the cause.
This must change.
Let the search begin - 2010!

[mssreader]

Couldn't agree more which is the reason Feinstein and Polosi are going to be voted OUT in California come next election and I'm going to help. Right now I don't care if you are black white or anywhere in between male or female, if you don't get it that you serve "for the people" you are out. We've got a majority who could help with the change we voted for but is the house or the senate going to do something? NO! Yes, I'm angry and Lieberman fiasco, politics as usual, was the final blow. "For the people" needs to be included in the oath of office and branded on foreheads.

[TakingBackTheUSA]

You two should read the article ALSO on HuffingtonPost concerning Pelosi and the rest telling the execs there will be no cash until you show us a plan for fixing this and repaying the debt.

[Totto]

An in-law is an executive at GM and vigorously supports Republicans who don't support the industry. Is there something in the water in Bloomfield Hills? GM, Ford and Chrysler ought to be made to discontinue gas hogs like the Mustang and upcoming Camaro, Challenger and El Camino. Pony cars for the 21st century? What planet are these people on? We need an auto industry and UAW with new leadership that begins to understand the world as it is, not as they remember it was.

[DWX]

A $25B only last the auto industry a 2-3 months of lifeline. Why not just shut down the auto industry altogether until the Recession is over (2 years) and compensate auto-parts suppliers (presumably under a thousand) with $1M each as a gift, while auto employees can collect extended unemployment benefits during that period. The total cost to taxpayer will still be way less than $25,000 million ($25B) which will only last 2-3 mo before another demands and extortion by these same Detroit crooks. Money down the drain!

[research]

Hey, These automakers are a big disappointment. mainly because of the Big fat cars they insist on and get stuck with when the cheap oil music ends.

But They actually make marginally useful cars. The auto industry is critical to our industrial base.

Compared the the 700B$ derivatives crony giveaway,

Helping the Auto industries survive is a well worth it.

However: Fire all the CEOs, and the top layer of execs. Cancel all bonuses and unvested stock. Have congress appoint New CEO and place people on the boards. Cap exec salaries. Give unvested stock instead.

Raise CAFE standards and require plug in hybrids be marketed. require propane/natural gas option on trucks.

Take stock in exchange for 25B$ with an offer to sell it back at market price when the auto makers recover.

[one4obama]

Let me guess. YOu work for one of the Big Three, right?

[research]

No, I just don't want to see us trigger a far worse depression by closing the doors in Detroit, while the bankruptcy proceeds.

We are all in this boat together.

The auto market is down worldwide.

We can profit from converting to Hybrids, and compressed air cars while rescuing the stockholders and workers. Clearly management needs to get scalped.

[zanbama]

Dear God,


Thank you for letting me realize how greedy we are. Please forgive us!

[bighillaryfan]

It sounds like a great return. Invest a few million lobbying, get a few billion back.

I will take that deal any day of the week.

[kellygrrrl]

look at their faces. Let's play Caption This.

"Don't touch me, old man. I will cut you."

[BabsfromKansas]

"HHMMM..how can I spin this?"

[BabsfromKansas]

"Wonder if I'll make it out of here before tee time?"

[plzchuteme]

Whoooooa! Who cut the cheese?

[plzchuteme]

I remember back in the 60's seeing Lee Iacocca interviewed. It was a time when bumper standards that made them stronger than aluminum foil were being proposed. Of course, the manufacturers were fighting this tooth and nail saying that it would spell doom to the car manufacturers and the public would never pay for increased safety. In essence, what he said was, that the government (the American people) better not mess with Detroit because as the auto industry goes, so goes the country. Talk about the tail wagging the dog. It sounded like a threat to me and I have not purchased an American branded automobile since.

[larry278]

Since Mr Iococca said don't mess with Detroit a lot of Americans quit messing with Detroit & bought foreign cars. They continue to buy foreign cars.

[ReasonableBill]

Corporate jets. Childish ploy. Sell the U. S. governments jet fleet first to save us money. Start with the fleet of Gulfstream's and Lear's parked at McDill in Tampa to ferry the General's around, because they cannot ride in less luxury.

[munki]

Trim all the fat?
Where do they start?

[nuclearmonkeys]

Don't forget the counter terrorism funds for "Luxury Pods" http://www.washingtonpost.com/wp-dyn/content/article/2008/07/17/AR2008071703161.html

[tedbear]

It seems a little unfair. Congress is dressing down the automakers but I don't remember them dressing down the Wall Street bankers with the same vigor.

The automakers need the bailout and this will help all of us. Congress gave Paulson a blank check for Wall Street, but this is a different story. Why? Is it because they don't care if the workers in this country starve to death?

Another thing, last night Charlie Rose had a New York Times reporter on, whose name I didn't get, but this guy should be fired. He ignorantly argued with a professional who studies auto companies, and was so rude he just kept cutting in when the other guest tried to make a point.

[Grunty1]

The cynical answer is that Wall Street was BEFORE the election.

[freebeer]

Another cynic would say this whole thing is political theater to fool people into thinking there will be oversight from a tough and vigilant Congress, looking out for the American people.

When in reality there will just be a few more weeks of Shock Doctrine fear mongering to soften us up, followed by a super-sweet deal for Detroit, with bonuses and corporate jets for all.

[jdmba]

I agree. I did not (and still do not) support the Wall Street bailout... But the Auto companies effect everyday, blue collar workers-- the people who need the money most. I don't see where all this criticism is coming from, in light of AIG's luxurious vacations on taxpayer's dime.

I don't see why they dont use the Wall Street Bailout funds to help the Autos... Force banks to lend credit for auto purchases, attach strings, etc. We can't outright deny them, after being so gracious to Wall Street fat cats.