Automakers caught in campaign crossfire
Election-year politics puts industry in middle
 | Rove: Irked |
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Last week an unlikely 81-year-old emerged from the shadows into the glare of political controversy.
Clint Eastwood sauntered out of a dark-toned Chrysler Group Super Bowl spot to growl out a tribute to the revival of domestic automakers.
"Detroit's showing us it can be done, and what's true for them is true for all of us," the Academy Award-winner rasped, urging a revival of American confidence.
The next day the political fireworks began -- a likely harbinger of things to come.
Republican political consultant Karl Rove was the first to attack the commercial. Rove said it amounted to a political endorsement of President Obama, who has been touting the resurgence of Detroit automakers in his re-election campaign.
"The president of the United States and his political minions are in essence using our tax dollars to buy corporate advertising," Rove charged.
Although Chrysler CEO Sergio Marchionne denied that the spot was political, the message for the automotive industry was clear: Like it or not, automakers are targets for election year sniping.
General Motors executives are concerned that the company will be in the campaign crossfire through November, said one person familiar with GM's internal discussions. They're resigned to the fact that GM ultimately will be a political lightning rod until the government sells its 33 percent stake in the company, which isn't likely to happen this year.
Obama critics attack on two fronts: the bailout of GM and Chrysler, and Department of Energy loans to foster advanced vehicle technology.
In fact, both programs started during George W. Bush's presidency. And Bush -- Rove's former boss -- last week told the National Automobile Dealers Association convention in Las Vegas that he approved the initial phase of the bailout because of the dire consequences of letting GM and Chrysler fail. Said Bush: "I'd make the same decision again if I had to."
Obama touts recovery
Obama clearly plans to campaign on GM and Chrysler's resurgence, both in terms of profits and jobs restored.
"There were some folks willing to let this industry die," Obama said at the Washington Auto Show in January. The president also showed his intentions last year with multiple victory laps through GM and Chrysler plants.
Republicans are likely to counter by pointing to the taxpayers' price tag for all those fresh profits and jobs. In late January, the U.S. Treasury Department pegged the government's expected losses from the bailouts at $23.77 billion.
That has put GM on the defensive. On Jan. 25, GM CEO Dan Akerson appeared before a congressional committee probing Chevrolet Volt battery fires during National Highway Traffic Safety Administration testing.
At the hearing, Akerson said: "Although we loaded the Volt with state-of-the-art safety features, we did not engineer the Volt to be a political punching bag."
GM North America President Mark Reuss says he cannot worry about the incoming fire: "If they're going to do it, they're going to do it. There is nothing much I can do about it other than to be transparent and move on."
Tesla, Fisker in cross hairs
Two recipients of the DOE's Advanced Technology Vehicles Manufacturing loans -- Tesla Motors and Fisker Automotive -- have been stung by criticism. GOP presidential candidate Mitt Romney last fall called for a congressional probe of the loans, which he termed "historic opportunities to line the pockets of major campaign fundraisers."
In an opinion article written for the Orange County Register, Romney criticized the $465 million loan to electric vehicle maker Tesla, calling CEO Elon Musk "a major Democratic donor."
Diarmuid O'Connell, Tesla's vice president for business development, says the company has "been called out in a very specific way on a couple of occasions."
O'Connell says that the attacks often confuse the advanced technology loans with either the GM-Chrysler bailout or a separate loan program that financed failed solar power company Solyndra. Critics also overlook Tesla contracts to supply EV technology to Daimler and Toyota, which he says demonstrate the company's credibility.
Like GM's Reuss, O'Connell says Tesla will stick to business, in this case launching the Model S sedan this summer: "I think the most important thing that we can do in the coming year is to execute against our milestones."
Ford, Nissan unscathed
Romney and others have attacked Fisker Automotive, which received approval for a $529 million loan, for building its Karma plug-in hybrid in Finland. CEO Henrik Fisker has said no loan money went to Finland.
But Fisker, who recently compared launching his first car to "running over fire while people are whipping you," last week laid off 66 employees and contractors, The automaker lost access to $336 million of that federal loan balance, which is earmarked for a second Fisker vehicle to be built in Delaware, after missing sales and production targets.
A company statement said it is trying to renegotiate loan terms.
Not all loan recipients have come under fire. Ford Motor Co., which received a $5.91 billion DOE loan in 2009, has escaped criticism. Ford used the funds to convert several plants to the production of fuel-efficient vehicles and components.
And Nissan North America, which received a $1.45 billion DOE loan, also has been unscathed. Nissan is using the loan money to build an assembly line for the Leaf EV and an EV battery module plant in Smyrna, Tenn.
Tesla's O'Connell, who held a State Department post in the George H.W. Bush administration, says that before the presidential campaign, support for alternative vehicle technology drew bipartisan support.
Says O'Connell: "I do hope that once we get through what has been a fairly acrimonious political season and shows no sign of abating, we'll get back to the things that we can agree on."
Lindsay Chappell, Mike Colias, Christina Rogers, Larry P. Velequette and Bradford Wernle contributed to this report
You can reach Dave Guilford at dguilford@crain.com. -- Follow Dave on 
