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Automaker Trade Groups Predict 40% Drop in Sales, Ask Congress for Help

March 23, 2020
Another coalition of manufacturing trade groups, this one representing carmakers, is asking Congress for help managing the impacts of the COVID-19 outbreak.

The leaders of three trade groups representing automakers, car dealers, and motor manufacturers sent a letter to Congress March 23. In it, the leaders of the Alliance for Automotive Innovation, the National Automobile Dealers Association, and the Motor & Equipment Manufacturers Association said that the COVID-19 outbreak poses a grave threat to the United States automotive sector and asking for assistance.

“Stalling sales and halted production threatens a vast network of businesses in every state,” the letter says, noting that a weakened auto sector also impacts suppliers, dealers and other businesses. According to the letter writers, the U.S. auto industry currently accounts for $2 trillion in economic output and about 10 million jobs. A chart accompanying the letter shows that, of 44 assembly plants in the United States, 42 are currently on suspended or stopped production.

The trade group leaders—John Bozzella of AAI, Peter Welch of NADA, and Bill Long of MEMA—go on to give an example of ways Congress could help their industries. Those policies include loan guarantees to affected businesses, ensuring that employers receive a tax break on workers’ paid leave at larger businesses and deferring 2020 quarterly federal tax payments.

It also suggests that the United States’ date of entry into force of the United States-Mexico-Canada agreement be delayed. The USMCA agreement, a Trump Administration update of the North-American Free Trade Agreement, or NAFTA, is currently expected to go into effect June 1. The trade agreement imposes heavy tariffs on cars made outside of North America.

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