Nov. 16 (Bloomberg) -- General Motors Co., Ford Motor Co. and Chrysler Group LLC may get relief from regulations such as higher fuel-economy standards as Michigan Republicans seek posts leading two U.S. House committees.
Representative Fred Upton of Kalamazoo is among candidates to become chairman of the House Energy and Commerce Committee, which oversees legislation on vehicle-safety and emissions, and Republican David Camp from Midland is in line to head the House Ways and Means Committee, which sets policy on tax issues.
“The election was a piece of luck for Detroit,” Sean McAlinden, chief economist at the Center for Automotive Research in Ann Arbor, Michigan, said in an interview. “When they needed a Democrat to bail them out with a bankruptcy, they got Obama. Now they need Republicans to fight these fuel mandates, and maybe even slow them down.”
Leadership positions for Upton and Camp would return the Michigan-based companies to the influence they had when Representative John Dingell from the state led the Energy and Commerce Committee, according to McAlinden, who advised President Barack Obama’s auto task force. Dingell was ousted two years ago as chairman by fellow Democrat Henry Waxman of California. Waxman and Dingell will remain on the committee when Republicans take control of Congress next year.
The Obama administration provided government financing to rescue Detroit-based GM and Chrysler of Auburn Hills, Michigan, through planned bankruptcies.
GM IPO Price
GM plans to raise as much as $12 billion in an initial public offering, according to a regulatory filing with the Securities and Exchange Commission today. The automaker increased the price at which it’s seeking to sell 365 million shares to a range of $32 to $33 each, from $26 to $29. The sale may trim the U.S. government’s stake to 43 percent from 61 percent.
Dingell helped automakers fend off tougher fuel-economy rules when he was Energy and Commerce Committee chairman, while his successor Waxman supported raising the standards. Now, the administration is weighing the possibility of almost doubling fuel-economy standards to 62 miles per gallon by 2025 models, based on an administration analysis released Oct. 1.
“One of my roles will be to use oversight to really control the job-killing, mind-numbing regulation” from the administration, Upton said in a Nov. 9 interview. “We will prevent the administration from regulating what it can’t legislate.”
Regulatory, Tax Burdens
Upton has support from Camp and Michigan Representative Mike Rogers of Lansing for the Energy and Commerce Committee chairmanship in a contest with Representative Joe Barton of Texas, a former chairman and currently the senior Republican on the panel.
“Fred fully understands the regulatory and tax burdens being placed not only on manufacturers and automakers, but our entire economy,” Camp said Nov. 10 in an e-mail.
The Republican “lineup clearly will be more supportive” of the auto industry on issues such as fuel economy, said Dave McCurdy, a former Democratic representative from Oklahoma who heads the Alliance of Automobile Manufacturers, a Washington-based trade group.
“I don’t think that’s just Michigan-based and it doesn’t just apply to domestic manufacturers,” McCurdy said in an interview.
Obama failed to reach agreement with South Korea last week in talks to secure a trade accord. The administration is pressing Korea to lower barriers to exports of U.S. autos. Ford, based in Dearborn, Michigan, and the United Auto Workers Union have pressed for changes in the initial agreement.
“We’re focused on getting it in place to pass muster in Congress and that demands effort on autos,” said Sage Eastman, Camp’s press secretary.
The auto industry also is seeking passage of a tax credit to offset costs for research and experimentation, Eastman said. On a per-capita basis, Michigan was the largest user of the credits, which expired last year, he said.
Clarence Ditlow, executive director of the Center for Auto Safety, said he doesn’t expect Republican control to lessen a focus on auto safety after Toyota Motor Corp.’s recalls of more than 8 million vehicles in the past year for unintended acceleration.
“‘All the manufacturers realize that that type of safety crisis is not in their benefit,” Ditlow said.
Issa on Toyota
Ditlow said Upton and Representative Darrell Issa, a California Republican in line to lead the House Oversight and Investigations Committee, had held Toyota accountable during Congress’s hearings about acceleration issues.
Tea Party-backed candidates who won seats in the House by campaigning against federal regulation and spending, including the GM and Chrysler bailouts, may lead opposition to increasing fuel-economy standards, said Russ Harding, senior environmental policy analyst at the Mackinac Center for Public Policy and director of the Michigan Department of Environmental Quality from 1995 to 2002.
“This stuff that Obama and some of the Democrats are talking about on the fuel standards is fantasyland,” Harding said. “You’re not going to achieve those numbers with technology we know about in this day and age.”
To contact the reporters on this story: Angela Greiling Keane in Washington at firstname.lastname@example.org; Jeff Green in Southfield, Michigan, at email@example.com; Craig Trudell in New York at firstname.lastname@example.org.