The automotive industry is building a case for federal assistance under a $2 trillion economic stimulus package as Senate Republicans and Democrats continue to negotiate the deal after efforts to pass legislation stumbled Sunday.
In an email to Congress obtained by Automotive News, the Alliance for Automotive Innovation reiterated the industry's role in the economy.
"In the United States, 14 automakers operate 44 assembly plants across 14 states. The U.S. auto industry accounts for about 10 million jobs, and auto manufacturing, sales and service account for almost $2 trillion in economic output," the alliance — which represents suppliers, automakers and tech companies — wrote in the email.
Challenges related to the coronavirus outbreak are directly impacting automakers and wide swaths of the auto sector, according to the email, with industry analysts expecting sales to be down by as much as 40 percent this month compared with 2019.
The email also includes a list of North American assembly facilities that have suspended production temporarily as a result of the coronavirus.
The National Automobile Dealers Association also urged Congress "for bold bipartisan action" to help small businesses, including the nation's franchised dealerships.
NADA, in a letter sent Saturday to Senate Majority Leader Mitch McConnell, R-Ky., and Senate Minority Leader Chuck Schumer, D-N.Y., said it strongly supports the economic stimulus package — called the Coronavirus Aid, Relief and Economic Security Act, or CARES Act.
"Over the last week, automobile and truck sales, which represent 19 percent of our nation's retail economy, have virtually stopped," NADA Chairman Rhett Ricart said in the letter. "This situation has created a massive liquidity problem and stressed auto and truck dealerships. Payroll is the highest dealership expense, but employees are the dealership's most valuable asset."
Meanwhile, the American International Automobile Dealers Association, in a letter sent Tuesday, thanked Congress and the administration for their “initial swift action” to the COVID-19 crisis. The trade group asked congressional leaders to consider the automotive retail industry and the nearly 9,500 international nameplate auto dealers in the U.S. as lawmakers negotiate the third phase of economic assistance.
“As Congress and the administration discuss the next steps, AIADA urges you to act quickly and purposefully to put forth strategies and policies that strength the economy, help stabilize markets and ensure liquidity for businesses,” AIADA CEO Cody Lusk said in the letter.
The group echoed others in the auto sector by asking Congress to reconsider the 500-employee threshold eligibility requirement for certain tax credits or deductions because dealership groups, as a combined organization, often exceed that threshold. Instead, AIADA is requesting that dealership groups be allowed to waive aggregation.
Ann Wilson, senior vice president of government affairs for the Motor & Equipment Manufacturers Association, said that while the Senate package addresses the concerns of small and large businesses, she wants to make sure medium-size suppliers and manufacturers — those with more than 1,500 employees that may not be eligible for small-business loans — are not forgotten.
"We know it's important for … medium-sized suppliers to continue to be viable, to be able to continue to have their work force available and to continue to be able to provide parts throughout the supply chain," she told Automotive News. "Our focus is preserving those manufacturers, offering them opportunities for loan programs that really focus on continuing to keep their doors open and continuing to be able to, in the future, be able to produce components and parts for the industry."
The three associations in a joint letter sent to Congress on Monday urged lawmakers and the administration to take “immediate action … to confront the economic slowdown being caused by COVID-19.”
“Stalling sales and halted production threatens a vast network of businesses in every state, which is why Congress and the administration must take important steps to pass a robust economic stimulus package that can assist businesses large and small as they work to confront the challenges that they face due to events beyond their control,” the groups said.
Specifically, the three groups are calling on Congress to provide loans and loan guarantees to large, medium and small businesses; extend tax deductions or credits to businesses with more than 500 employees that are providing paid leave due to COVID-19; expand or extend expensing for equipment and machinery, and delay the June 1 entry-into-force for the new North American trade deal.
The groups also called for delaying or deferring quarterly federal tax payments in 2020. The administration announced last week the tax deadline is moving to July 15.