Alabama and other state lawmakers mount push to help revive car industry

Alabama and other state lawmakers mount push to help revive car industry
The automotive industry is a major part of the Alabama economy and lawmakers would like to see it supported as part of a national coronavirus aid package. (file)

A bipartisan group of U.S. House lawmakers from states with a large auto industry presence is mounting a push to aid the sector that has idled factories and seen car sales plummet due to the coronavirus.

Nine lawmakers from both parties so far have signed onto a draft letter urging Speaker Nancy Pelosi and Minority Leader Kevin McCarthy to consider fresh proposals to support auto industry employment in future coronavirus legislation.

The effort, led by Michigan Reps. Debbie Dingell, a Democrat, and Fred Upton, a Republican, and lawmakers from Ohio, Tennessee, Texas and Alabama, doesn’t propose specific forms of aid for carmakers, parts suppliers or dealers. However, the lawmakers wrote “it will be necessary to support demand for some time to ensure a meaningful recovery,” according to the draft, which was provided by Upton’s office and reported earlier by The Washington Post.

The lawmakers are trying to recruit others to sign on to the effort.

“Given the enormity of the industry’s economic footprint throughout our nation and its significant legacy, we seek your assurance that an appropriate response will be included so that American workers in the automotive industry can help drive a robust recovery,” the lawmakers wrote.

Auto sales fell 47% in April after a 38% decline in March as stay-at-home orders in most parts of the U.S. have idled much of the U.S. economy. Auto assembly and parts factories have been idled since mid-March.

In an interview Wednesday, Dingell said shortages of masks and essential supplies that are largely imported illustrate why action is needed to ensure U.S. manufacturing recovers from the crisis. She cited the closing of AK Steel Corp.’s plant in Dearborn, Michigan – which will eliminate 343 jobs in her district, The Detroit Free Press reported – as an example of the pressure facing manufacturers.

“Everybody is working together, and the two issues that are front and center right now are keeping workers safe and the liquidity of the suppliers so that the automakers can get back up and running,” she said.

Discussions about auto industry aid have been underway since at least April, including a possible program to stimulate new car sales to fuel an industry recovery. But to date, no legislative proposals have emerged.

“When you’ve got high-value, durable goods that rely on a pipeline of inventory already built, I also believe you do need a short-term stimulus to get that kick-started,” Fiat Chrysler CEO Mike Manley said on an earnings call Tuesday. “The so-called cash-for-clunkers scheme actually did have a strong impact here in the United States in terms of kick-starting” the industry in 2009.

Randy Parker, vice president for sales at Hyundai Motor Co.’s U.S. subsidiary, said in a May 1 interview that “‘cash-for-clunkers really helped fuel the auto industry.”

“If the government should support the industry with a cash-for-clunkers, we should be able to significantly benefit from that once again,” he said. “That’s just going to be more fuel to the fire to help us reignite and rebound even quicker.”

In April, Dingell said a new car purchase incentive program to help the industry had been discussed, but that a consensus hadn’t been reached on whether to pursue it. On Wednesday, she said options for the aid are being discussed.

Mercedes-Benz, Honda and Hyundai operate auto plants in Alabama and Mazda Toyota Manufacturing USA is building a new plant in Huntsville, where Toyota operates a separate engine plant. The state is home to 40,000 automotive manufacturing jobs. More than 150 Tier 1 and 2 automotive suppliers have operations in the Alabama.

(With assistance from Billy House, Gabrielle Coppola and Chester Dawson. Contact the reporter at [email protected].)

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