With the Democrats retaking control of the House and Senate in this month’s midterm elections, the political complexion of Washington has changed, and the big American automakers are likely to change their political stripes too.
In recent years most of the political handouts from Detroit’s Big Three have gone to the Republican Party, which has controlled Congress since 1994 and long has been associated with lower corporate taxes and limited business regulation. Since 1994, the Big Three automakers have given roughly two-thirds of their political donations to Republicans and the rest to Democrats.
Now to curry favor with the newly dominant Democratic Party, political observers expect Detroit’s big automakers to revert to their pre-1994 contribution pattern, when the Big Three distributed donations roughly equally between the two parties.
“My prediction is we’ll see a shift of money back toward the Democrats now that they hold the power again, but I still think automakers will give a slim majority of their contributions to the Republicans,” said Massie Ritsch, a spokesperson for the Center for Responsive Politics, a nonprofit Washington research group that tracks money in politics.
“Since 1990, which is as far back as our data go, this has been the trend of major industries — there’s a shift of money to the party in power,” Ritsch continued. “You are never going to have the oil industry completely change to being a Democratic industry, or see the unions favoring the Republicans. So no one really flips to another party. You see more of a movement to parity. The ruling party gets more, but slightly less than the favored party.”
Still, Detroit’s clout on Capitol Hill may not be so strong, given the size of the automakers’ political contributions.
The Big Three contributed a total of $1.69 million in political contributions in the 2006 election cycle, compared with $92.84 million donated by the legal profession and $38.58 million given by health professionals, according to data from the CRP. The total includes money from company executives and company-controlled political action committees.
Even car dealers contribute more money than Detroit’s big automakers, giving a total of $5.74 million in the 2006 election cycle, according to the center’s data.
“We are not really talking about a lot of money when you compare it to other industries,” said Ritsch.
Even so, the Big Three, in the midst of big restructuring programs, are looking to garner political support.
Top executives of Ford, General Motors and DaimlerChrysler AG’s Chrysler Group met with President Bush at the White House last week to outline problems facing their industry, including the rising cost of health care, pensions, energy and commodities.
The executives also discussed trade issues, such as the big advantage they say an artificially weak yen is giving their Japanese rivals.
The Bush meeting isn’t likely to change much for the automakers, analysts said, but politically, the wind in Washington may be blowing in Detroit’s favor. One promising sign is the ascendance of Rep. John Dingell, D-Mich., a longtime friend of the industry who is in line to lead the House Energy and Commerce Committee. With this in mind, it might behoove the auto industry to give more money to Democrats, said Ritsch.
“If the automotive industry doesn’t throw more money at the Democrats, they might find the next few years difficult for them in Washington, D.C.,” Ritsch said. “It might sound cynical, but industries that want to have access have to pay their campaign contributions.”
The automakers are not alone. All kinds of groups are now vying for political influence in Washington, notes Nathaniel Persily, a professor of law and politics at the University of Pennsylvania, adding that phones on K Street “have been ringing off the hook in way they haven’t in years,” referring to the D.C. neighborhood known as the headquarters for the nation’s most powerful lobbyists.
“It’s going to be interesting because many of the Democrats who were elected in the 2006 elections were elected on the basis of protectionism, and so the issue of free trade is going to be at the forefront of Democrats’ mind,” he said. Democrats also are expected to try to move ahead on energy policy and health care.
“So it’s important for the automakers to have influence across a range of policy areas over the next few years to protect their interests,” he said. “When it comes to health care, this used to be seen as an anti-business issue, but now a third of the compensation that companies like the big automakers are paying their employees goes toward health care, and that means they are having difficulty competing.”
The Big Three have long said that rising health care costs place them at a disadvantage to their foreign rivals, who generally have younger employees, fewer retirees and more government help with health care.