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.