PHILIP NUSSEL

Why the boardrooms won't be boring in the coming year's political fracas

Philip Nussel is managing editor of autonews.com.Philip Nussel is managing editor of autonews.com.
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If you thought the bailouts of General Motors and Chrysler brought too much government influence into the auto industry, brace yourself.

President Obama -- big surprise -- said this week he'll be running for re-election in 2012. This campaign will bring an unprecedented amount of government and politics into the U.S. auto industry -- and it will have direct influence on the management of GM, Chrysler and other automakers through 2012. And the UAW's in the mix, too.

First of all, the Obama administration will need to cash in all or most of its stakes in GM, Chrysler and Ally Financial (the former GMAC) before Labor Day 2012. That way the administration can show the bailouts of the industry were indeed a huge success that not only saved the economy but also yielded a profitable return on the government's investments.

You can expect Obama and the Democrats to use the bailout's success to blister Republicans who want to play the "socialist" card -- and to court voters in crucial swing states in the Midwest, such as Ohio.

And since it's an election year, look for GM, Chrysler, the UAW, and rank-and-file employees to write lots of big checks to Obama and Democratic Party re-election campaigns. Nobody from the Obama campaign is going to directly solicit these donations, but the wink-and-nod game will surely be played. You think any senior executives at GM or Chrysler will be dumb enough not to get out their checkbooks when they get invited to an Obama fund-raiser?

The Obama re-election campaign will be keeping its fingers crossed that the Chevy Volt and the Nissan Leaf prove to be huge successes. Besides the government bailout of GM, let's not forget Japan-based Nissan received $1.4 billion in government loans to produce the Leaf in Tennessee. If either vehicle suffers a major glitch -- either technically or saleswise -- Obama will face brutal criticism of government-subsidized automaking.

President Barack Obama takes a look at the Chevy Volt during a groundbreaking ceremony for a battery factory in Holland, Mich., in July 2010.

Photo credit: GM

Finally, you've got to expect the issues of government and union ownership of GM and Chrysler to get tossed around in the political arena amid this year's Detroit 3 contract talks.

The UAW already is making a lot of noise about its upcoming contract talks with Ford -- but wait a minute, the union's health care retiree trust funds own big stakes in Ford's Detroit 3 competitors, GM and Chrysler. Does this not constitute a conflict of interest? And how can the Obama administration avoid its own conflict, particularly if things go in the tank and Obama's National Labor Relations Board needs to get involved in the Ford-UAW talks?

The old cliche is that politics makes strange bedfellows. But with the bailouts looming large and an election year ahead, the boardroom could get more interesting than the bedroom.

You can reach Philip Nussel at pnussel@crain.com.

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