DaimlerChrysler’s new suit in town

DaimlerChrysler, the nation’s third largest auto manufacturer, has hired an industry insider and onetime aide to former New York City Mayor David Dinkins as vice president of external affairs and public policy for the Americas.

John Bozzella has spent the past 11 years as a senior executive at Ford Motor Co., where he worked on legislative and labor issues and as chief of staff to Ford’s president. Bozzella replaced Tim McBride, who joined Freddie Mac as senior vice president of government relations earlier this year.

Bozzella will spend a few months working at the auto company’s headquarters in Auburn Hills, Mich., before joining its D.C. office.

“A lot of what I’m going to be focused on is the need to knit together our corporate strategy and public policy,” Bozzella told The Hill. “We need to more tightly knit together what is happening in the public-policy world with our business strategy,” he said, adding that environmental and trade issues will be high on the company’s agenda.

American automakers are under financial distress from rising gas prices, skyrocketing healthcare costs and declining sales. General Motors and Ford, the two biggest U.S. auto manufacturers, reported heavy losses, and Standard & Poor’s downgraded their debt to junk status. William Clay Ford Jr., Ford’s CEO, recently announced he will not accept compensation until the company turns a profit.

GM and Ford also provide health insurance to 1.7 million Americans, or more than one-half of a percent of the U.S. population, according to The New York Times.

But DaimlerChrysler, formed in 1998 when Germany’s Daimler-Benz acquired Chrysler for $37 billion, has not experienced the same financial distress as the big two American automakers. In the first quarter of 2005, the Chrysler Group had an operating profit of $327 million, although that was down by 17 percent from the previous year. Still, Chrysler has remained strong while sales of Mercedeses, DaimlerChrysler’s mainstay cars, have slowed.

In this climate, auto-industry experts expect Congress to do little.

“I expect Congress to be mindful of the financial state of Ford and GM,” said Peter Morici, an expert on the auto industry at the University of Maryland. “Raising emissions standards [could be] very damaging to them, as they are behind on hybrid technology.”

The biggest impediment to growth in the auto industry is the crushing cost of health-insurance benefits. “Until the Big Three negotiate healthcare benefits that are in line with the rest of the private sector,” Morici said, “there’s not much hope of Congress relieving them of that burden.”

Moreover, a promotion for an experienced industry executive could not happen without a hint of controversy.

Bozzella’s appointment led some Republican lobbyists to question the wisdom of hiring a former Democratic aide. When the major movie studios hired former Rep. Dan Glickman (D-Kan.) as their Washington lobbyist last year, some Republicans cried foul.
The pressure applied by Republican activists and lawmakers on companies to hire Republicans has backfired. In 1997, then-Majority Whip Tom DeLay (R-Texas) held up a vote on an intellectual-property issue to pressure the Electronics Industries Alliance (EIA) into hiring a Republican. Instead, the EIA hired former Rep. Dave McCurdy (D-Okla.) and the House ethics committee criticized DeLay’s move.

Nevertheless, Republicans who have made the leap from the Bush administration or Congress to K Street have been named to many of the biggest jobs that lobbying firms, interest groups and corporations offer in Washington. These include Brenda Day, a respected lobbyist who is director of DaimlerChrysler’s Washington office.

“It’s not a question of party,” said Dennis Fitzgibbons, DaimlerChrysler’s director of public policy and former aide to Rep. John Dingell (D-Mich.). “The job is not just Washington. It’s all of North America. We wanted someone with talent and experience, and [Bozzella] has worked well with Democrats and Republicans.”