Auto-State Lawmakers Mount Push to Help Revive Car Industry

(Bloomberg) -- A bipartisan group of 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 House 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 Representatives Debbie Dingell, a Democrat, and Fred Upton, a Republican, and other 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 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-home orders in most parts of the U.S. to combat the coronavirus have idled much of the U.S. economy. Auto assembly and parts factories have been idled since mid-March.

Earlier: Ford Sees Talks With U.S. on Cash for Clunkers-Like Stimulus

In an interview Wednesday, Dingell said shortages of masks and other 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 an interview Friday 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 were still being discussed.