Last week’s announcement that had Chrysler turned a Q1 profit and GM had “repaid” taxpayer loans brought a flurry of political posturing about the success or lack thereof of the auto bailout. With Republicans laying into the auto bailout from several angles, President Obama dedicated his weekly address to a defense of industry assistance. Obama still frames the bailout as an unpleasant necessity, but argues that last week’s news means the chances that taxpayers will recoup their “investment” are improving. And apparently the Treasury agrees. According to the Detroit News, Treasury has revised its estimate of auto bailout losses (not counting GMAC) downwards, from $30.6b to $28b. Progress, sure, but hardly a sign that taxpayers can expect full payback from its state-owned automakers.

A Florida state representative is standing athwart the legislative juggernaut that seeks to expand the use of red light cameras throughout the state. Representative Rob Schenck (R-Spring Hill) last month won approval by a 7 to 5 vote from the House Governmental Affairs Policy Committee for his bill expressly preempting the ability of local jurisdictions to operate automated ticketing machines.

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According to popular wisdom, the Koreans have no love lost for the Japanese. And likewise. What’s more, Koreans and Japanese car makers are bitter competitors for foreign market share. So wouldn’t it stand to reason that Korea would jump on the “down with Toyota” bandwagon with their 96 million feet? Just the opposite is true.

The Chosun Iibo, according to Wikipedia “one of the major newspapers in South Korea,” takes the position that Toyota could very well be “a scapegoat for U.S.-Japan squabbling.” (Read More…)

Yesterday, a strange love-fest between U.S. Ambassador to Japan John Roos and Japan’s transport minister Seiji Maehara ensued. After their meeting in Tokyo, as reported by the Nikkei, the ambassador and the minister said that everything is hunky-dory, and that Toyota’s recent recalls won’t undermine relations between the U.S.A. and Japan. Which is odd in itself: Since when does a $15 gas pedal get a leading role on the world stage of international politics?

Ambassador Roos effusively told reporters that the recall issue ”in no way has any kind of direct or indirect impact on the strength of the bilateral relationship between the United States and Japan.” Who said it would? (Read More…)

Thanks to the unionization of the US auto industry, its politics (and accordingly, those of the state of Michigan) tend to be of the center-left persuasion. This tendency was doubtless aggravated over the last year, as a congressional bailout of the industry was denied by southern Republican senators. But even in Michigan, the union-industry alliance isn’t strong enough to counter the trend towards ever more divisive politics, as two recent stories show some of the ideological cracks forming in this now highly politicized industry. First,according to the Freep, the National Tax Day Tea Party will re-open last year’s political wounds by staging a rally outside the RenCen during the Detroit Auto Show this year. The idea behind the rally is to “make a peaceful yet clear statement against government takeover of America,” specifically the government ownership of General Motors. Though it’s clearly an empty gesture intended to rally political support more than change anything, it will be a jarring contrast to the usual convivial mood at the NAIAS. And it’s just one of several ways in which the politicization of the industry is becoming steadily less containable.

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As I noted yesterday, the intersection of automobiles and politics is a difficult area of analysis. In the United States, where motorists don’t face the daily challenges they do in Russia, discussions of politics in an automotive forum too often gets overwhelmed by larger political battles. Before you know it, a conversation about the future of electric cars can turn into a debate on military and foreign policy, and an auto-industry bailout can be justified by virtue of its small size relative to the bank bailout. In short, everything happens within a context, and politics is all about context. TTAC has always waded into political issues based on their relevance to cars, motorists, consumers and the industry, and we’ve held some fascinating explorations of political topics ranging from red-light and speed cameras and foreign oil dependence to anthropogenic climate change, bailouts and pay-per-mile tax schemes. In the interest of providing the right balance of big-picture and street-level issues in our coverage, we’re curious: what car-related political issues fascinate, concern or perplex you most?

The Detroit News reports that Senator John McCain (remember him?) has declared Chrysler unlikely to survive. Mr McCain, who was serving as grand marshal of the NASCAR Sprint Cup series race at the Phoenix International Raceway, even went as far as to argue

No, I don’t think we ever should have bailed out Chrysler and General Motors. We should have let them go into bankruptcy, emerge and become viable corporations again. It was all about the unions. The unions didn’t want to have their very generous contracts renegotiated so we put $80 billion into both General Motors and Chrysler, and anybody believes that Chrysler is going to survive, I’d like to meet them.

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In a follow up to E. Niedermeyer’s previous post, details have emerged about the scheme to give rebates to buyers who trade “clunkers” for new, fuel-efficient vehicles. FT.com (Financial Times) reports that the program will cost taxpayers about $4 billion and will spur, according Brian Johnson, an analyst at Barclays Capital, the sale of 3 million units in the “near term” (whatever that means). With the US’ SAAR projected at approximately 9 million, this is a very optimistic prediction.

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Point three of Barack Obama’s ethics pledge to the American people is that “no political appointees in an Obama-Biden administration will be permitted to work on regulations or contracts directly and substantially related to their prior employer for two years. And no political appointee will be able to lobby the executive branch after leaving government service during the remainder of the administration.” Obviously that’s a high standard, and one that seems increasingly important as the lines between government and industry are blurred by rampant bailouts. And clearly not everyone makes the cut. But as Obama assembles a team to “restructure” the auto industry, the spirit (if not the letter) of his ban on revolving door hiring seems to be falling by the wayside.

According to the Detroit News, the leading candidate for Obama’s “Car Czar” position is a certain Mr Steven Girsky, who the DetN describes as a “longtime auto industry analyst.” Having advised Centerbridge Industrial Partners and JP Morgan on auto issues, Girsky is more than simply an analyst. Automotive News [sub] reported in October of 2008 that Girsky was hired by the United Auto Workers to advise on the proposed Chrysler-GM merger and as AN dryly put it “he may also advise the UAW on a possible federal bailout of the U.S. automakers.” Girsky was also a consultant to GM’s CEO and CFO for just under a year, leaving the firm in 2006. As of October 2008, he also served on the board of Dana Corp, a massive auto supplier firm.

Does Girsky’s experience make him incapable of living up to Obama’s high moral standards? Technically, no. Like Tom Daschle before him, Girsky is clearly a lobbyist, though he’s not registered as one (the de facto bright line rule for Obama). But having been paid by the UAW within months to advise them on bailout strategy, he’s also clearly not going to live up to the “no work on regulations or contracts directly and substantially related to their prior employer for two years” standard. And if he is appointed as Car Czar, it’s safe to say that he will be guiding regulations and money disbursements that are “substantially related” to the work he has been doing for the UAW.

But as with so many political decisions, the choice of a Car Czar will likely be decided on the lesser of two evils. After all, Girsky may be steeped in the cozy relationships between GM management, the UAW and the government, but at least he has industry experience. Steven Rattner of Quadrangle Group has also been named as a possible czar, but as Newsweek reports, his main qualifications appears to be as a Democratic fundraiser (he is married to the National Finance Chairwoman of the DNC) and media-elite insider. Sure he covered energy and economy beats at the NY Times back in the day, but there’s little to indicate that he would make an especially good Car Czar.

Meanwhile, for all of Girsky’s industry connections, some of his ideas are decidedly TTAC-ish. Like when he got AN Executive Editor Edward Lapham‘s collar up by suggesting [sub] that the Detroit Three might need to cut as many as 70 percent of its dealerships. He even seems to cause some consternation among his UAW employers, based on this post at Salon. And that might just indicate the kind of experience and perspective that Obama’s team clearly needs. After all, his Climate and Energy Czar Carol Browner told Automotive News [sub] at the DC Auto Show that there are “lots of clean cars out there and options for the consumer.” You know, because the OEMs say so.

Meanwhile, it seems that nothing will stop or slow the rolling tide of money that is about to slosh into the automotive industry. $2b worth of battery research money is said to be going into the forthcoming stimulus package, and the Senate just approved an amendment to the stimulus bill which would make auto loan interest and state sales taxes deductable from federal taxes. Whether Girsky or Rattner is appointed as Car Czar won’t likely make much of a difference in terms of the amount of money that will be funneled into the industry over the following years. The crucial distinction is whether experience is worth the possibility of a conflict of interest.

Obama’s strict ethical standards are admirable, but if his options for Car Czar are between an industry insider who defines the term “revolving door” and a candidate who is being considered solely due to his political connections, something has clearly gone wrong. I’m not sure this kind of compromise is what people had in mind when they voted for “change we can believe in.” But in this familiarly frustrating choice, at least Girsky has a record of taking stands on crucial issues facing the industry. If he can publicly explain his recent UAW dealings in a way that passes Obama’s muster, Girsky may actually be the least of the available evils.