The Sale That Got AwayMary Beth Regan
Attired in finely tailored suits, starched shirts, and power ties, they piled off buses onto Capitol Hill, square-jawed and determined. A clutch of eager GOP lawmakers arriving for work? Nope. It was a revved-up contingent of luxury-car dealers in pursuit of The Ultimate Sale. Their quota: convincing Congress that the Clinton Administration's stiff tariffs on U.S. sales of Japanese luxury cars would cost thousands of American jobs.
On May 23, some 850 dealers--in town for the annual meeting of the American International Automobile Dealers Assn.--descended on the halls of Congress to plead for a reversal of President Clinton's sanctions on top-of-the-line Japanese cars. "We're in the middle of a war," says Kent Petersen, a dealer from Ogden, Utah. "We can't afford to sit on the sidelines."
It was the first official visit to the Capitol for Geoffrey Pohanka, 37, a third-generation auto dealer from suburban Washington. As he made his way to the office of Representative Tom Davis (R-Va.), Pohanka insisted that a 100% tariff on the Lexus and Acura models he sells could cripple his family's $200 million-a-year company. "Three generations of work," Pohanka says, "and this could bring down the whole business."
Fidgety and distracted by the C-SPAN broadcast on the TV in his office, the congressman listened politely to Pohanka's pitch. But Davis wasn't buying. "I'm not sure I agree with what the President has done," he noted. "But I'm not sure we want to undermine the Administration on this one." A half-hour later, Pohanka got the same sobering message from Representative Frank R. Wolf (R-Va.) The luxo-lobbyists "had a good point," Wolf said, "but I just don't know what Congress can do."
Indeed, the lobbying expedition proved the equivalent of wasting all day on a showroom tire-kicker with empty pockets. Even before the lobbying began, House Speaker Newt Gingrich (R-Ga.) had told the group that "Congress has no interest in fighting the Administration on this as the Japanese watch." Instead, he urged the auto dealers, who may travel to Tokyo during the coming weeks, to appeal to Japanese leaders to negotiate a settlement with the U.S. before the June 28 deadline when the tariffs take effect.
That was hardly what the dealers had hoped to hear from GOP leaders. "We got a cold dose of reality," sighs one. The importers claim the targeted high-end cars account for less than 10% of Japanese auto makers' American sales--hardly enough to put the carmakers out of business. In the U.S., by contrast, the AIADA claims that 2,000 dealerships could go bust, jeopardizing the jobs of 81,000 people. "My lifestyle won't change," insists Howard A. Keyes, a Lexus dealer from Van Nuys, Calif. "It'll hit my employees."
"FEATHERED NESTS." Such complaints didn't draw much sympathy. "The dealers are only worrying about their own little feathered nests," says Representative James A. Traficant (D-Ohio). But the lobbying blitz wasn't a total waste. At local dealers' urging, Representative Mark Foley (R-Fla.) called U.S. Trade Representative Mickey Kantor and White House Chief of Staff Leon Panetta to plead for his constituents during their visit. And the California delegation persuaded Representative David Dreier (R-Calif.) to dash off a note to Kantor imploring the Administration to "solve the dispute with Japan before we wipe out one of California's most important industries."
Still, Congress isn't about to take up the cause of several thousand specialty-car dealers who cater to a well-heeled elite--not when the U.S. government is taking a get-tough trade stance that is playing well with most working-class Americans. Gingrich promised the dealers he would consider a financial bailout for any of them forced out of business by the sanctions. But that's a little like a used-car salesman swearing his clunker is in A-1 condition. Dealers know the best they can do is to sit tight--and hope the U.S. and Japan settle their differences. For merchants practiced in the art of the deal, Capitol Hill proved one sale they simply couldn't close.