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Quad-City Times: Q-C congressional delegation ponders automakers rescue


By Ed Tibbetts

The debate over whether the government should help the Big Three automakers is reverberating in the Quad-Cities as car dealers are pushing for a rescue package.

Thus far, most members of the area’s congressional delegation haven’t committed to helping Detroit. But with the possibility of votes today and Thursday, the pressure is building.

“If we don’t help them out, we’d go from recession to depression,” said U.S. Rep. Phil Hare, D-Ill., the most enthusiastic backer in the local delegation for helping out the Big Three.

“What would happen is millions of people would lose their jobs and their homes,” Hare said.

Auto industry executives said 4.5 million jobs nationwide are tied to the auto industry, and 3 million jobs could be lost in the next year. General Motors, in particular, is burning through cash and has said it could be out of money by the end of the year without federal aid.

On Tuesday, Iowa car dealers had a conference call with U.S. Sen. Chuck Grassley, R-Iowa, to press their case.

“If the Congress doesn’t step in and help, it could have negative ramifications for not just Detroit ... but every community in Iowa,” said John McEleney, president of McEleney Autocenter.

McEleney is vice president of the National Auto Dealers Association. His Iowa City and Clinton operations employ 140 people.

It’s not clear what impact a bankruptcy filing by one or more of the Big Three might have on the Quad-City economy.

Tom Pospisil, president of Lujack’s Northpark Auto Plaza, said Tuesday it still is getting healthy interest in select GM brands, and that its sale of 15 different brands provides it a cushion.

Quad-City economic development officials said Tuesday they aren’t aware of companies here with significant ties to the automakers.

Alcoa’s Davenport Works does produce aluminum sheet for auto body panels, but a union official said it’s not a large part of the business.

Still, some auto dealers say they’re concerned, and that car makers and sellers have a broad footprint in towns across the state.

There are 372 dealerships across the state, with 200 of them selling General Motors brands.

“Reality is starting to set in,” said Gary Thomas, president of the Iowa Auto Dealers Association. “They’re saying my livelihood is on the line.”

He said sales are already down.

They may have their work cut out for them convincing lawmakers, however.

Representatives for Grassley and U.S. Sen. Tom Harkin, D-Iowa, say constituent calls are running against a rescue package.

Neither has said how they would vote.

Harkin has said he would consider it, which is about the same position Bruce Braley, D-Iowa, is taking.

“I think generally speaking, Rep. Braley is open to a plan to help the auto industry get back on its feet,” said Jeff Giertz, a spokesman.

U.S. Sen. Dick Durbin, D-Ill., believes aid to the industry is “vital” but wants to see the final language, a spokesperson said.

Grassley told reporters early Tuesday that automakers could help their cause if their executives copied ex-Chrysler chairman Lee Iacocca, who cut his pay to $1 when asking for federal help in the late 1970s.

The Republican sent a letter to company executives last week, suggesting just that. “That would help a lot in their coming to Congress,” Grassley said, but added, “I don’t see that they’re willing to do it.”

Lawmakers already have taken fire for their vote in October to approve a $700 billion rescue plan for Wall Street.

The Bush administration scrapped the original target for the money — bad housing-related assets — and instead shifted it toward capital infusions for banks and financial firms.

Tim Albrecht, a spokesman for the American Future Fund, a free market nonprofit based in Des Moines, said the organization would be contacting its members to urge against a rescue plan as the debate continues.

“They’ve propped up banks, they’ve socialized institutions and now they’re trying to bail out the auto industry and the result is more of the same,” he said.