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DETROIT – Forget the latest turbocharged engine or aerodynamic design.
One of the star attractions last week at the North American International Auto Show was the spectacle of House Speaker Nancy Pelosi, D-Calif.; House Majority Leader Steny Hoyer, D-Md., Secretary of Labor Hilda Solis and a bevy of other Washington officials touring the show.
Encircled by boom mikes and cameras, the group from Washington tried plugging in the new Chevy Volt, the electric car from General Motors.
They traipsed across the convention center to review Chrysler’s new power trains. Then they got behind the wheel of the Ford Focus.
More than anything that was said or done, however, the tour and the attention it garnered reflected the new relationship between the industry and the government, which has invested more than $80 billion in propping it up.
“We’ve seen ideas turned into policy turned into product,” Pelosi said approvingly after seeing the Volt.
Her trip through the exhibition hall resembled a car-shopping expedition, except that instead of the usual salesmen, the Washington group was cajoled by chief executives and board chairmen: Edward Whitacre from General Motors, Bill Ford Jr. and Alan Mulally from Ford, and Chrysler’s Sergio Marchionne.
The government’s nurturing of the U.S. auto industry, Pelosi and other Democrats hope, will create more U.S. jobs.
“What we’re seeing today is a renaissance,” she said at a luncheon last Monday.
Through the bailouts, emissions-control legislation, health-care debate and trade agreements, the federal government can exert profound influence on all of the automakers. But the outfit with arguably the most at stake is General Motors, into which the government has invested $50 billion and become the company’s majority shareholder.
Before meeting Pelosi and the others, Whitacre said he had planned to tell them that “they made a great investment in GM.”
“The government’s investment is well placed, and I think they will make a lot of money,” Whitacre told reporters.
Still, not everyone was so enamored with the government’s involvement.
About two dozen tea party protesters – activists who advocate lower taxes and less government – endured the cold and snow to register dissent.
At least some in Detroit welcomed the federal attention.
“I always said the U.S. administration was the only car-producing nation in the world where the administration and the politicians in the capital didn’t know about the American car companies, didn’t care about American car companies,” GM Vice Chairman Bob Lutz said in a speech last week, according to news accounts. “None of the politicians drove American cars – they drove Japanese and German and Swedish cars. … Tragically we had to go through Chapter 11, but now, finally our government in Washington is not only keenly aware of us but also very much desirous of seeing us succeed.”
United Auto Workers President Ron Gettelfinger, who accompanied Pelosi through much of her tour of the show, said the federal government has a role to play as it negotiates trade agreements and other issues.
Steven Rattner, who led the Obama administration’s effort to restructure GM and Chrysler, attended the show and said that in the wake of the federal intervention he sensed “constrained optimism” about the industry.
He is writing a book about his experiences in the bailout, to be titled “Overhaul.” Although Congress is paying lots of attention, Rattner said the government’s intention is to retreat.
“The government’s goal is to step back, step back, step back,” Rattner said. “I don’t see the government plunging in deeper.”
