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GM and Chrysler Lobby Government’s Fuel Efficiency Rules

Chrysler GM Government

Chrysler is only 9% government owned unlike GM.

Bailed-out automakers that are still partly government owned: General Motors and Chrysler together with the industry coalition lobby versus proposed fuel efficiency rules supported by the Obama administration.

The lobby the government idea by the federally owned companies was disapproved by environmental organizations, safety advocates and watchdog groups saying the government should not allow the companies from meddling with legislation aimed for public welfare improvements.

On post-bailout, GM was 61% government-owned but after the November stock offer, it was reduced to 33%. Chrysler was 9% government-owned, a much lower stake thus the focus was on GM’s lobbying moves. Treasury officials said they will allow GM to normally operate like a commercial, private firm as meddling, such as political, could obstruct company recovery.

Spokesman Greg Martin from the Treasury said their stand stays and said that with the government’s stake in the company, GM still retains the same First Amendment rights its competitors do. When considered as a global company that sells a machine that weighs several thousand pounds with an equal number of parts, there are very few policy issues that don’t affect.

For 2010 lobbying, GM spent $6.6 million comparatively lower than $14.3 spent in 2007 prior to the economic crisis.  What the company’s important effort came as Congress argued about the auto safety bill drafted during the Toyota recalls.

‘Black boxes’ on each car are now being mandated but could raise the budget for regulators as well as the fines for automakers that won’t follow the rules, a rule supported by the Obama administration. GM argued that the increase is too much. The bill was held in the Senate last December.

GM along with other automakers voiced their concerns regarding the raise on fuel efficiency standards to nearly 60 miles/gallon. The government is in the course of placing fuel efficiency standards for the years 2017 to 2025.

On Monday, a letter agreed on by GM, was sent by the Alliance of Automobile Manufacturers to Rep. Darrell Issa, House Committee chairman on Oversight and Government Reform. The letter cautioned that the proposed measures could raise vehicles cost to almost $6,435. It mentioned the new federal regulation of fuel economy labeling and rear visibility the industry is faced with.

GM and Chrysler are also swaying a free trade agreement proposal with South Korea. This is seen as a threat by automakers because Seoul may keep U.S. cars out yet let South-Korean vehicles in.

Despite continued lobbying, GM suspended political contributions in 2009 when it went into bankruptcy. It was saved by a $50 billion government aid. Political donations began again in 2010 that in August, GM donated $41,000 to lawmakers associated groups. Most of $36,000 went to the Congressional Black Caucus Foundation.

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