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ANALYSIS: Auto industry, environmentalists butt heads

Wednesday, December 3, 2008 | 5:58 p.m. CST

WASHINGTON — Watch out for family fights, Mr. President-elect. Although Democrats will control both the new Congress and White House, the battle over a multibillion-dollar auto industry bailout already is pitting two major party constituencies against each other: big labor and environmentalists.

The United Auto Workers, along with Detroit's Big Three, are pushing for an infusion of emergency loans for the carmakers' immediate needs — even if that means diverting $25 billion that had been set aside for creating cleaner vehicles. Environmentalists balk at that notion, saying the money is sacrosanct and insisting that any new help be tied to strict requirements for greener cars.

The intramural fight helps explain why President-elect Barack Obama has stayed vague on his views on the details of the bailout and Democratic leaders have seemed uncertain about whether to push one through. It's also at the heart of the disagreement between Democrats and the Bush administration over how to structure any carmaker rescue.

After rushing Congress back into session last month to consider an emergency auto aid plan, House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., abruptly reversed course and called off the debate.

They ordered the Big Three to submit elaborate loan applications to Congress before they would even schedule votes on a rescue. The separate blueprints submitted Tuesday by Chrysler LLC, Ford Motor Co. and General Motors Corp. called for up to $34 billion in government aid.

Hearings are set for Thursday and Friday on Capitol Hill, and Reid said the Senate will begin debating a bailout on Monday — but neither he nor Pelosi has promised to act.

Even if lawmakers decide to lend the struggling industry a hand amid warnings that one or more of the big companies could go bust before year's end, a battle is still raging over where the money should come from — and what conditions should be placed on it.

If past history and the unwritten rules of politics are any guide, the autoworkers and their brothers and sisters in organized labor are likely to win the day for the carmakers.

The unions have often prevailed in disputes with environmental activists, particularly in resisting tough fuel-efficiency rules, by deploying their formidable organizing and lobbying clout and making the case to lawmakers that their constituents' jobs would suffer if labor didn't get its way.

They've also provided far more financial support to Obama and Democratic candidates than environmental organizations have — more than 20 times as much in the last election, according to the Center for Responsive Politics, a nonpartisan campaign finance research organization.

Still, environmental groups enjoy powerful allies in the Democratic Party — Pelosi prominent among them — and exert a strong pull in policy debates.

"It is a challenge, because here you have the union core group that supports the Democratic Party and was very strong supporting Obama's candidacy, and you have environmental groups who also are very strong in the Democratic Party, and when it comes to autos, those two constituencies conflict with each other," said Richard W. Hurd, a Cornell University labor relations professor.

Democrats, particularly those who toppled Republicans or weathered tough re-election fights with the help of union money, "really would like to do something to help out" the auto industry, the backbone of the devastated U.S. manufacturing sector and a provider — directly or indirectly — of millions of jobs, Hurd said. "The problem is, what do you do about the environmental side of it?"

Labor and environmental activists are loath to call attention to their split, particularly at a time when both are working hard to forge alliances on key issues, including their call for enactment early next year of a massive economic recovery package that includes a $100 billion array of environmentally friendly projects estimated to create as many as 2.5 million "green jobs."

But both concede privately that their agendas clash on the auto bailout, and people tracking the measure acknowledge that the rift has made a challenging situation even more challenging.

On one side is the full muscle of organized labor, arguing that there's no option but to help the Big Three to stem the collapse of one or more of the storied companies and the disappearance of a huge number of unionized jobs.

"We have a situation here where we need the emergency assistance or the companies are in danger of collapsing," said Alan Reuther, the UAW's legislative director. If that means borrowing from a $25 billion program that was supposed to be used for the firms to retool their factories so they could make cleaner-burning vehicles, so be it, he said.

"We're confident the Obama administration will make sure the ... program is fully funded," Reuther said.

Environmental groups have long criticized the automakers for focusing on gas-guzzling sport utility vehicles and pickup trucks, which yield higher profit margins, at the expense of a shift to smaller, greener vehicles. Now they say proponents of a bailout are asking Congress and taxpayers to put aside the very environmental advances that could make the U.S. auto industry competitive in order to put a financial Band-Aid on three badly injured businesses.

Or, as Pelosi put it a couple of weeks ago: "It's like taking your kids' college education fund and spending it on your credit card bills."

If the car companies are going to get the money they and the unions are clamoring for, said Phyllis Cuttino of the Pew Environment Group, "it needs to come with strong strings attached," including requirements that they follow higher fuel-efficiency standards and drop their opposition to efforts by California and other states to impose even stricter rules.

"We have no quarrel or disagreement with the men and women of the workforce for the Big Three," Cuttino said. "We believe, like they do, that these three companies ought to start manufacturing cars that the American public wants and is demanding."


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