Can a government of politicians keep politics out of GM?

McClatchy NewspapersJune 1, 2009 

WASHINGTON — The federal government, in a nearly unprecedented move, now has a stake in running General Motors, and that means politics is likely to creep into a lot of big decisions, despite President Barack Obama's vow that Washington won't get heavily involved.

Congress, however, with most members facing re-election next year, has veto power over almost any decision, either by pressuring policymakers at hearings or by pushing legislation. Members have shown in recent months they're willing to do both.

"They definitely will use the bully pulpit to raise questions," said Ben Kleinerman, an assistant professor of constitutional democracy at Michigan State University, though because the process is more deliberate and complicated, the legislative path could prove more difficult.

Even now, that pulpit is moving into place. On Wednesday, the Senate Commerce Committee plans a hearing featuring the heads of GM and Chrysler, as well as car dealers from the home states of the panel's two leading members. The dealers are expected to urge lawmakers to provide government help to dispose of thousands of unsold cars and trucks.

That hearing is only the opening gun because dealers are just one of the powerful players in this complex political drama.

Politicians are hearing from union and non-union workers frightened of losing theirs jobs, health care and pensions. Congress wants to reassure consumers concerned about their warranties, and hopes to ensure that taxpayers don't get socked for billions more in corporate rescue dollars.

Looming over all this are the 2010 congressional elections, when all 435 House of Representatives seats and 36 Senate seats — 18 now held by Republicans and 18 by Democrats — will be at stake.

"If this seems to be going badly and hurting states like Michigan, it could be very, very tough for the president and Democrats next year," said Douglas Koopman, a professor of political science at Calvin College in Grand Rapids, Mich.

Obama said Monday that he wants the government to be a muted partner in helping the bankrupt GM restructure itself.

"The federal government will refrain from exercising its rights as a shareholder in all but the most fundamental corporate decisions," he said. "When a difficult decision has to be made on matters like where to open a new plant or what type of new car to make, the new GM, not the United States government, will make that decision."

Members of Congress Monday weren't talking about specific restrictions, but said they'll be watching GM and Chrysler closely.

Sen. Debbie Stabenow, D-Mich., urged a recommitment to "a strong manufacturing strategy that will rebuild the middle class." Sen. Sherrod Brown, D-Ohio, warned, "If taxpayers commit more resources to GM, they deserve to know those funds will be used to build cars at home rather than abroad."

Also, he said, communities in Ohio "deserve to know why certain plants are being closed while others will remain open. . . . We need a coordinated federal response that invests in these workers and their communities.

Not surprisingly, there also was a fiercely partisan dimension to the political reaction.

Democrats were generally supportive, while some Republicans think Obama is giving them fresh ammunition to charge that he's leading the country down a socialist path and spending taxpayers' dollars recklessly.

"Does anyone really believe that politicians and bureaucrats in Washington can successfully steer a multinational corporation to economic viability?" asked a skeptical Ohio Rep. John Boehner, the House Republican leader.

All these opinions are likely to get an airing over and over again on Capitol Hill in the coming months.

First up at Wednesday's hearing are Fritz Henderson, GM's chief executive; James Press, Chrysler's president; John McEleney, the National Automobile Dealers Association chairman and auto dealers Peter Lopez of Spencer, W. Va., and Russell Whatley of Mineral Wells, Texas.

West Virginia is the home state of committee chairman Sen. Jay Rockefeller, a Democrat. Texas is the home of Sen. Kay Bailey Hutchison, the top Republican on the panel.

Chrysler dealers want some help in disposing of inventory, and GM and Chrysler dealers want "sunlight," said Bailey Wood, spokesman for the dealers association. "Who's requiring these closings?" he asked. "Who's behind this and why?''

ON THE WEB

Congressional Quarterly preview of 2010 Senate races

GM bankruptcy filing

Senate Commerce Committee auto hearing notice

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McClatchy Newspapers 2009

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