Lobbying Efforts Pivot Towards Buying Stimulus

As the United States slowly begin to emerge from a never-before-seen pandemic shutdown, the auto industry has weathered the storm better than expected. While nowhere near pre-pandemic forecasts, the real figures are tickling the 50-percent decline rather than 70 or 80 percent. Still, as a sector that relies on a chain stretching from resource procurement to manufacturing to distribution and repairs, the financial impact is remarkable.

A rapid and healthy recovery is the goal, one supported by several congress members in states that hold the keys for the automotive industry. A letter has been drafted and is being circulated, encouraging congress to quickly establish aid for the auto industry. 

Stimulus is What’s Being Urged

Lawmakers are pushing for a large-scale auto stimulus package to provide security to one of the largest industries in the nation. The basis of the letter is to create a stimulus package for Americans that could spur them to spend money. Whether that comes as a rebate program or through another Cash for Clunkers-style package isn’t immediately clear.

More than a million people were employed in auto manufacturing and over two million are employed in auto retail and repairs, according to BLS data. If Americans aren’t spurred on to buy cars and restore a sense of normalcy to the auto industry, those jobs and massive companies are at stake.

“Given the enormity of the industry’s economic footprint throughout our nation and its significant legacy, we seek your assurance that an appropriate response will be included so that American workers in the automotive industry can help drive a robust recovery,” wrote lawmakers including Haley Stevens (D-Mich.), Marcy Kaptur (D-Ohio), Debbie Dingell (D-Mich.), Fred Upton (R-Mich.), Daniel Kildee (D-Mich.) and Terri A. Sewell (D-Ala.).

Not Another Bailout

Those involved in the lobbying effort are quick to identify that it isn’t another bailout for carmakers that they’re seeking. A bailout reminiscent of the $80 billion-dollar package handed out after the 2008 recession is not seen as the answer to post-pandemic recovery.

Congresswoman Debbie Dingell is the U.S. representative for Michigan’s 12th congressional district. She served in a top role at GM and was previously a consultant to the American Automobile Policy Council. Regarding the letter urging a buying stimulus, she says, “I don’t think anybody wants a handout. If we’re going to get business up and running again, there’s got to be demand for goods.”

Other Industries Already Supported

The precedent has been set for a stimulus package to help the automotive industry. Just last month, the U.S. government agreed to a bailout to the tune of $25 billion dollars for the airline industry. As most flights have been grounded and demand for flights has ground to a halt, the funds were earmarked in the $2.2-trillion-dollar CARES act.

Without a stimulus package – not a bailout – the chances of a lasting impact that ripples throughout the economy for years is possible. It comes just a handful of years after automakers recovered from the 2007 recession.

Kaptur’s district in Ohio both includes and neighbors districts with significant auto manufacturing facilities. He says, “The industry was doing real well. We had come out of the slump in 2008. If we could help the airline industry, what about the motor vehicle industry?”

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Car Biz Today, the official resource of the retail automotive industry.