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February 23, 2009 2:45 AM, EST

Government Raises Presence During Recession

Suppliers Wary, but Welcome Assistance
By Jonathan S. Reiskin, Associate News Editor

This story appears in the Feb. 23 print edition of Transport Topics.

ORLANDO, Fla. — With the United States in a recession, the federal government is commanding a larger presence, two business lobbyists said, and while that does bring with it the potential for trouble, many executives at a manufacturers’ conference here welcomed the potential for help.

At a Feb. 16 meeting here of the Heavy Duty Manufacturers Association, executives said they were wrestling with low demand for their products and that managing was made more difficult by having to deal with extremely cautious lenders.

While the lobbyists said the Democratic White House and Congress could mean greater union influence and more regulations, it also means more spending on contracts and possible tax incentives that could help end the recession more quickly.

“I think we would all like less government in our lives, but it’s painfully obvious there will be a lot more of it in the future,” said Dennis Michels, chief executive officer of Link Manufacturing Ltd. and the chairman of HDMA.

The Motor & Equipment Manufacturers Association, the umbrella group that includes HDMA, asked the Treasury Department for assistance on Feb. 13, MEMA President Robert McKenna said at the Heavy Duty Dialogue conference.

The MEMA proposal, McKenna said, asks for federal guarantees of parts makers’ accounts receivable from General Motors, Ford and Chrysler, and on commercial bank loans made to automotive suppliers.

McKenna also said MEMA would like to see aid to the “Detroit Three” car makers include provisions to speed up payments to suppliers to within 10 days from the 45 days that has been more typical.

“This is a critical situation, and access to liquidity and capital is needed now,” McKenna said.

“As much influence as our product, customer and geographic plans have on our survival, governmental issues impact them all,” said Charles “Chip” McClure, chairman and CEO of ArvinMeritor Inc.

He said his Troy, Mich., company was one of several manufacturers that got involved with a recent bill before Congress concerning light-duty trucks and had the provisions rewritten to include medium-duty vehicles.

McClure said he is particularly interested in legislation on energy, highway funding, vehicle-safety technology and labor relations.

Much of the conference’s discussion of policy issues came during a panel moderated by Howard Abramson, Transport Topics’ publisher and editorial director, and featured lobbyists Timothy Lynch of American Trucking Associations and Ann Wilson of MEMA.

Lynch, an ATA senior vice president, said the federal stimulus bill just signed contains $27 billion for highway spending, or a year’s worth of funding from the multiyear highway program that expires at the end of September. He said he hopes Congress views this funding as a “gift” rather than a “replacement,” and is not factored into the next highway bill.

One of his main worries, Lynch said, is that Congress could fail to consider the totality of its actions on transportation.

“Congress doesn’t coordinate well. I’m worried they could go one way on energy, another on the environment and still another on highway funding,” he said.

A related issue he mentioned concerned the labeling of energy taxes. ATA has asked for increases in diesel and gasoline taxes to pay for highway and bridge improvements, with the caveat that increased revenue must be dedicated to that infrastructure.

In talking to legislators, Lynch said there is often great resistance to higher fuel taxes. However, if the same tax is called a “carbon tax” and levied on the hydrocarbons in petroleum products, then legislators will say they back the taxes as environmental protection.

Wilson, also a senior vice president with her organization, warned that some large-vehicle regulation can be all encompassing. When the U.S. Department of Transportation was considering bus safety rules, she said she was told DOT would probably include trucks as well, rather than keep them separate.

She also recommended that HDMA members contact their representatives to oppose the Employee Free Choice Act, often referred to as “card check.” The proposal would eliminate the requirement of a National Labor Relations Board election with secret ballots to ratify employee desires for union representation.

Wilson also recommended tax incentives to increase the interest in advanced safety and environmental systems.

Lynch said Congress and the Obama administration “will push hard on a very robust agenda,” but it remains to be seen who will do all of the pushing. While Ray LaHood is in place as secretary of transportation, Lynch said he has no assistant secretaries yet, nor administrators to run key agencies within DOT.