Automobile dealers have been among the biggest contributors to U.S. political campaigns over the past decade, surpassing all but two groups in donations.
That $13 million investment may be paying off as the dealers get a lot of attention on Capitol Hill.
Recommended Stories
Congress has held hearings on the planned shutdown of thousands of dealerships and is debating ways to provide relief to the businesses. Almost a quarter of the members of the House of Representatives signed letters to President Barack Obama and his auto task force questioning plans to close the dealerships.
The lawmakers’ involvement may disrupt plans by General Motors and Chrysler to emerge from bankruptcy with a leaner dealer network.
“The intention of bankruptcy is for companies to streamline their operations,” said Maryann Keller, an auto analyst and president of Maryann Keller & Associates, based in Stamford, Conn. “If Congress does something that says, ‘No, you can’t terminate contracts that you believe are to your detriment,’ of course it threatens them.”
Executives of Detroit-based GM, which is to shrink its dealerships to as few as 3,500 from 6,000, and Auburn Hills, Mich.-based Chrysler, which plans to shut 789, said the reductions were crucial to their viability. As a result, the National Automobile Dealers Association — whose members are in all 435 U.S. congressional districts — is asking its more than 17,000 dealers to help it delay, if not scale back, the closings.
Almost 200 dealers visited their lawmakers in Washington last month, and the association has asked its members to recruit their workers to contact local representatives. The McLean, Va.-based group estimates that on average each dealership has 52 salesmen and support staff, and the dealers are often the largest employers in many small towns.
The association’s political action committee has donated more money to federal candidates in the last 10 years than all but two PACs, according to the Center for Responsive Politics, a Washington research group. It gave more than $13 million from 1999 through 2008, behind only the National Association of Realtors and International Brotherhood of Electrical Workers. “When an organized industry with a history of generous giving to members of Congress appeals for help, those members aren’t likely to turn them down cold,” said Rogan Kersh, associate dean at New York University’s Robert F. Wagner Graduate School of Public Service.
Lawmakers responded by sending letters to Obama and his task force urging a review of the planned closures. Signing the letters were 104 House members — 83 of whom received PAC donations from the dealers’ association for their 2008 or 2010 races.
Lawmakers say GM and Chrysler should at least give dealers more time to wind down their businesses, especially when the automakers have gotten billions of dollars in federal aid.
“I don’t believe that companies should be allowed to take taxpayer funds for a bailout and then leave local dealers and their customers to fend for themselves,” said Senate Commerce, Science and Transportation Committee Chairman Jay Rockefeller, a West Virginia Democrat.
