Pelosi: Hands off auto industry

She favors private sector solutions after $80B public infusion

David Shepardson / Detroit News Washington Bureau

Washington -- House Speaker Nancy Pelosi said Friday that Congress should take a hands-off approach to overseeing the government's $80 billion investment in the auto industry.

"We want private sector solutions. We don't want (the) government running companies," Pelosi said in an interview with The Detroit News.

"To the extent that we can fade from importance in terms of what is happening (to GM and Chrysler), the better."

But Pelosi said Congress has legitimate questions that need to be answered about the "fairness" of decisions by General Motors Co. and Chrysler Group LLC to close more than 2,000 dealers by the end of next year.

The automakers say those dealer reductions are crucial to their restructuring.

The House passed a spending bill in July with a provision that seeks to reverse the closings.

Pelosi said Congress might still pass legislation on dealers, "if there isn't some other fairness that is injected."

GM and Chrysler officials met Wednesday with House Majority Leader Steny Hoyer, D-Md., dealers and a White House official in search of a compromise that won't require congressional intervention.

Pelosi's interview with The News came on the eve of a luncheon she'll attend today in Grosse Pointe Shores to raise money for the Democratic Congressional Campaign Committee.

Ticket prices range from $2,500 per person to $30,400 per couple.

The Democrats will have to defend two first-term Michigan congressmen in re-election campaigns next fall: Gary Peters of Bloomfield Township and Mark Schauer of Battle Creek.

Pelosi said she plans to attend the North American International Auto Show in Detroit in January at the invitation of Rep. John Dingell, D-Dearborn. She said Dingell approached her this week about taking members to the show.

"We're putting that in the works right now," Pelosi said.Attending the show is "a sign of the importance (members of Congress) place on the auto industry to our economy," she said.

Pelosi said she supports the Obama administration's decision to bail out GM and Chrysler -- a move that has been loudly criticized by Republicans.

"There are reasons why we went down that path and I would hope that that investment would lead to a viable auto industry in our country," Pelosi said.

In recent years, congressional Democrats have often been at odds with executives of Detroit's Three automakers, especially on environmental issues. But Democrats are close to the United Auto Workers union whose members work in the plants.

In December, Pelosi dropped her objections and pushed a bill through the House to rescue GM and Chrysler. But the bill died in the Senate, and President George W. Bush agreed to save them with $17.4 billion in loans.

She said the decision to save Detroit automakers was critical to ensuring the country has a strong manufacturing base, and ensuring national security.

"This is not about auto companies; this is about an industry that is important to our country," Pelosi said. "This is something that everyone has a vested interest in -- whether you live in Detroit or not."

Pelosi said Democrats want automakers to "thrive," and she hasn't ruled out additional support for automakers if they show that they are "viable."

Both GM and Chrysler have sought loans from the government's $25 billion program to retool auto plants to build more fuel-efficient vehicles.

The government has awarded about $8.5 billion toward that goal, including $5.9 billion to Ford Motor Co.

Pelosi said the success of the $3 billion "cash for clunkers" program, which offered buyers up to $4,500 for swapping older vehicles for new ones with better mileage, "showed that people wanted to buy more fuel-efficient vehicles."

"That tells us that there is a market and an appetite in the public for Made in America, Detroit-made cars that are more fuel efficient," she said.

The speaker praised the deal struck by the White House and automakers in May to set national fuel-efficiency and tailpipe-emissions standards that essentially are what California sought to impose on its own.

"We have tried to harmonize the laws ... so that Detroit doesn't have to deal with 50 different jurisdictions when they are trying to build a car for the future," Pelosi said.

dshepardson@detnews.com (202) 662-8735