House Lawmakers Urge Relief For Auto Industry in Next Coronavirus Bills

May 13, 2020 by Gaspard Le Dem

WASHINGTON – A bipartisan group of House lawmakers on Tuesday urged Congress to provide funding for the U.S. automobile industry in future coronavirus stimulus packages.

“America’s motor vehicle industry must remain the heart of our nation’s manufacturing capability,” wrote the lawmakers in a letter to House Speaker Nancy Pelosi and Minority Leader Kevin McCarthy. “The projected economic fallout for the industry is grave.” 

The letter, signed by 52 members of the House, says the auto industry could face financial challenges due to COVID-19 that “exceed those of the 2008 financial meltdown.”

“Many businesses in the industry face a cash crunch even as they prepare to ramp back up,” wrote the lawmakers, which included Representatives Debbie Dingell, D-Mich., and Fred Upton, R-Mich. “Liquidity is challenging, particularly for suppliers, and it will be necessary to support demand for some time to ensure a meaningful recovery.”

Major car manufacturers across America have halted production lines and laid off workers to make up for a steep decline in vehicle sales amid the pandemic. 

IHS Markit, a data analytics firm, expects U.S. vehicle sales to drop to 12.2 million units in 2020, a 26.6% decline from the previous year. Global sales could drop by 22%, according to the firm. The decline is in part due to the closure of thousands of car dealerships, which has forced retailers to rely on online vehicle sales.

In March, General Motors announced it would lay off 6,500 salaried employees and indefinitely suspend production in North America to help prevent the spread of the virus. Other companies like BMW, Nissan, and Subaru have also furloughed thousands.

In Detroit, a major U.S. manufacturing hub, a number of assembly plants are slated to resume operations next week, but labor groups have pushed back on reopenings over concerns for the safety of workers. 

“While the companies have the sole contractual right to determine the opening of plants, our UAW focus and role is and will continue to be, on health and safety protocols in which we have the contractual right to protect our members,” said United Auto Workers President Rory Gamble in a statement last week. The UAW created a joint task force in March with GM, Ford, and Fiat Chrysler to protect manufacturing and warehouse workers at all three companies. 

The automobile industry supports nearly 10 million U.S. jobs — around 5% of all private sector employment in America — according to the Alliance of Automobile Manufacturers.

After the Great Recession, the U.S. government injected more than $80 billion into the auto industry to help General Motors and Chrysler survive bankruptcy and prevent job losses. Critics of the move said that car manufacturers should be able to support themselves.

On Tuesday, House lawmakers were quick to dispel the notion that coronavirus relief funding for the auto industry amounted to a bail out.
“Michigan’s and our nation’s auto industry will need support. But not what we did before,” said Fred Upton in a tweet. “There will be no cash for clunkers program. One of the things we’re discussing now is something that’s actually consumer-driven. Not a handout, not a bailout. But incentives for consumers.”

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