#Congress

HUMMER fans have a new champion in Illinois Senator Roland Burris, who has agreed to investigate GM’s shutdown of the SUV brand according to Hummerguy.net. Attempts to keep the HUMMER brand alive are being fielded by Capital & Labor International Coalition, a recently-founded fund management firm created by Thane Ritchie, founder of Ritchie Capital Management, as well as failed HUMMER bidder Raser Technologies and The Electric Motor Corporation. According to Hummerguy,

CLIC is hoping for an “acquisition by coalition,” which would involve cooperation with private capital and U.A.W. resources. Union representatives from both HUMMER production facilities were on hand to hear the plan and are running the idea up the chain of command to the International U.A.W..

Funny or Die’s Presidential Reunion from Will Ferrell

Remember when we reported that the cash cow known as in-house dealer finance wouldn’t be covered by the Consumer Financial Protection Act, currently making its way through congressional committees? That version of the bill passed the House Financial Services Committee (with some questionable support), but now Automotive News [sub] reports that the Senate Banking Committee has passed its own version which does make dealer finance subject to regulation by the Consumer Financial Protection Bureau. The Senate version would also make the CFPB an office of the Federal Reserve, rather than a stand-alone agency. So, should an agency set up to prevent another financial crisis extend regulation to dealer finance operations? Dealers aren’t happy about the idea, but traditional consumer advocates aren’t the only ones saying yes…

A few days ago, James Sikes and his runaway Prius was all over news. Until we mentioned that something is fishy. Sikes’ driving skills were put in question. Stories about a wife swapping website emerged. Stories about bankruptcy. Stories about an unpaid lease on the Prius. And sundry other stories. Quickly, Sikes turned into Balloon Boy 2.0

Michael Fumento, director of the Independent Journalism Project, went on Neil Cavuto’s show on Fox Business and said: “It appears that everybody on planet earth suspected that there was something horribly wrong with this picture – except for the national media. The real hoax wasn’t James Sikes, it was in fact our press.”

After three separate bailouts totaling over $17b, Congress is beginning to wonder if keeping auto-finance giant GMAC alive was worth it. Forbes reports that the Congressional Oversight Panel reckons at least $6.3b of that money could be gone forever, as GMAC flounders towards barely breaking even. And like the rest of the bailouts, the fundamental problem is that the influx of federal cash has allowed GMAC to pretend like it’s not struggling for survival. The panel report [ full document in PDF format here] notes [via Automotive News [sub]]

Treasury’s previous and current support is not underpinned by a mature business plan. Although GMAC and Treasury are working to produce a business plan, Treasury has already been supporting GMAC for over a year despite the plan’s absence. Given industry skepticism about GMAC’s path to profitability and the newness of the non-captive financing company model, it is critical that Treasury be given an opportunity to review concrete plans from GMAC as soon as possible.

Sound familiar?

GM’s recent reinstatement of 661 culled dealers has put pressure back on Chrysler to come to arrangement with the dealers it shed during last year’s bankruptcy and bailout. Rep. Chris VanHollen, the sixth ranking Democrat in the House or Representatives, tells Automotive News [sub] that with GM buckling to dealer pressure, the time has come for Chrysler to follow suit. “There’s no quicker or easier way to build this network than to reinstate its terminated car dealerships,” says VanHollen, who drafted much of congress’s dealer arbitration legislation. The Committee to Restore Dealer Rights contacted Chrysler CEO Sergio Marchionne “to discuss the reinstatement of the rejected dealers who had their franchises so abruptly taken and were unfairly terminated.” The response?

We believe that all communications concerning the subject matter of the arbitration should be between counsel and request that your clients follow this procedure in the future. Please ask them not to send such communications to Mr. Marchionne or any other Chrysler personnel.

Oh snap! Chrysler isn’t going down without a fight… even if that means taking on the representatives who have oversight of the government’s eight percent stake in the automaker.

Chrysler’s troubled relations with its dealers took another turn for the nasty this week, as culled dealers teamed up with lawmakers to criticize Chrysler’s decision to open new dealerships near the sites of several culled dealers. As with GM’s dealer struggles, this latest controversy centers around Colorado, where culled dealers are protesting Chrysler’s behavior in the Denver Post. Culled dealers have seen franchises in their former areas awarded to chains like AutoNation before congressionally-mandated arbitration had even given them the opportunity to contest their culling during last year’s bankruptcy proceedings. “This is not right,” said one dealer. “We specifically asked (Chrysler) not to redistribute the franchise before our arbitration.”

After Transportation Secretary Ray LaHood received a somewhat half-hearted tongue-lashing from the House Oversight and Government Reform Committee, and after a more vigorous (yet equally unsatisfying) grilling of Toyota CEO Akio Toyoda, yesterday’s hearings wound down with a third panel. Panel three opened with a boost to the committee’s emotional outrage batteries courtesy of the Saylor family relative Fe Lastrella, as well as some of the first compelling evidence of an undiscovered problem with Toyota vehicles from the firsthand experience of Kevin Haggerty. These two witnesses gave evidence that was in step with a lot of the previous testimony, offering more new questions for legislators than answers. But after these two spoke, the committee heard from former Carter administration NHTSA administrator Joan Claybrook and the director of the Center for Auto Safety, Clarence Ditlow. Claybrook and Ditlow were the first witnesses to provide suggestions for NHTSA reform, but after the confusion of the day’s testimony, the committee apparently didn’t realize that their recommendations were aimed at bringing NHTSA regulation forward, into the past.

News that the FBI had raided three Japanese supplier companies in the Detroit area came in the middle of yesterday’s epic Toyota hearings, adding to the day’s chaos and misinformation. The FBI said clearly at the time that Denso, Tokai Riko and Yazaki were raided as part of an antitrust investigation, which we now know [via Reuters] involves alleged cartel activities in the wiring harness supply market, and involves European firms like France’s Leoni as well. Despite the fact that Denso and Yazaki are cooperating with investigators, and that the US raids appear to be in support of an EU investigation, Rep Mark Souder (R-IN) took the opportunity to connect the Denso raid with the Toyota recall hearings in shameless style. And all to help clear the name of the US-based supplier CTS, which has been blamed for the sticky pedal recall, which just so happens to be in Rep. Souder’s district. Full, mind-blowing quote after the jump.

Japanese reaction to the kabuki dance is muted. From the Asahi Shimbun to the Mainichi Shimbun, all papers refrain from any criticism of either side. Except for the occasional “Japan-bashing” comments by readers, officially everybody is carefully sidestepping that trap. Just as Toyoda did during yesterday’s grilling on the hill, when he said that Toyota is being treated fairly in the U.S., contrary to what his wrenching gut said.

Japan’s transport minister Seiji Maehara was likewise diplomatic. He said Thursday he is satisfied with the testimony, reports the The Nikkei [sub]: “As a Japanese and U.S. company, I hope Toyota will ensure accountability and will make efforts to regain the trust of customers.”

QOTD is a fairly irregular exercise for us, but we’d be remiss if we didn’t dust it off for today’s marathon hearings before the House Oversight and Government Reform Committee. Needless to say, the ten-ish hour affair offered too rich a bounty of choice quotes to properly choose just one. And so we have two: the first and one of the last quotes of the day’s proceedings. The day opened with the following words from Chairman Edolphus Towns:

Good morning. I thank you all for being here. It is hard to imagine the horror of the event that took the lives of an entire family near San Diego, California on August the 28th, 2009. California highway patrolman, Mark Saylor, his wife, their 13 yr old daughter, and Mrs Saylor’s brother, Chris, were driving in a Toyota Lexus, a loaner car that the Toyota dealer provided while their car was being repaired. As they drove along the highway, suddenly the car… accelerating [sic] rapidly, he stood on the brakes, but nothing happened. No matter what he did, he could not stop the car from flying down the road, faster and faster. As this car reached top speed in just seconds, it was all he could do just to kep it under control. In a frantic call to 911, his brother-in-law, Chris, reported the gas pedal was stuck, the brakes did not work, and they were barreling down on an intersection. He yelled over the phone “hold one, hold on, hold on and pray. And those were his last words.”