GM strengthens D.C. presence

Industry

WASHINGTON — As General Motors commits to investing billions of dollars in electric and autonomous vehicle development, its reputation in the nation’s capital will be essential for guiding policies that prop up the transformation.

Once a company that was harshly criticized by U.S. lawmakers for an announcement in late 2018 that it would trim its salaried work force and halt production at several plants as part of a restructuring, the Detroit automaker is now strengthening its presence in Washington as it goes all in on EVs.

As part of the strategy, GM has been pursuing a deliberate effort to bulk up its D.C. office, most recently with the hiring of former NHTSA chief David Strickland in September and public policy veteran Omar Vargas in July. The election of CEO Mary Barra for a two-year term as chair of the Business Roundtable, a Washington group that represents the CEOs of some of America’s largest companies, also amps up GM’s D.C. clout.

“Do we have the resources to achieve what we’re trying to accomplish?” said Vargas, GM’s vice president overseeing global public policy. “I think that’s where our leadership said, hey, let’s look at how do we strengthen and enhance what we have today to help ensure that we have the right public policy team to help us successfully move forward that transition” to EVs and autonomous technology.

Vargas, who began his role at GM in August after working as senior vice president and chief government affairs officer at 3M Co., said the automaker’s policy priorities — ranging from EV charging infrastructure to consumer incentives and investment tax credits — are focused on driving the broader acceptance and deployment of EVs. Those priorities require a collaboration with government.

“We have to have a presence in Washington,” he told Automotive News. “We have to be known and knowable to the people that matter because without that principle — that core element to our strategy and to our positioning in Washington — we may not be as effective in helping to bring to government our knowledge, our resources, our expertise to help develop those policy solutions.”

GM’s D.C. footprint totals about 30 people, including communications and legal staff who also support its public policy operations. The total does not include employees from the automaker’s military defense unit, GM Defense, who work out of the office here.

While automakers often have a prominent voice in Washington, under the Biden administration the industry is “square in the middle of trade policy, environmental policy and labor policy,” said Kristin Dziczek, senior vice president of research at the Center for Automotive Research in Ann Arbor, Mich.

For automakers such as GM — which aims to stop selling new gasoline-powered cars and trucks by 2035 — relationships in Washington are crucial as they seek to educate lawmakers and inform policies that will enable a zero-emission portfolio.

“D.C. still runs on relationships,” Dziczek said. “Having those personal relationships and connections for companies with the people who are writing the laws, the people who are writing the regulations, that’s helpful to a company to understand where things are going and to be influential in the process.”

Casey Burgat, director of the legislative affairs program at George Washington University, said by virtue of GM’s size and how many workers it employs, “they’re always going to be able to get inside lawmakers’ doors.”

“They are going to impact the electric vehicle future from here on out,” he added. “They employ a ton of people. They spend a ton of money. They bring in a lot of tax revenue. All of these things are good for lawmakers.”

The fragility of the industry’s relationship with Washington was on full display in November 2018 when GM was blasted by lawmakers including Rep. Debbie Dingell for announcing a major overhaul of its global operations that included job cuts and possible factory closures in Michigan, Ohio and elsewhere.

Dingell — a Michigan Democrat who spent more than 30 years at GM, where she was president of its philanthropic arm and a senior executive for public affairs — criticized the restructuring at the time. In a 2018 CNN interview, she referred to the automaker as “the most thoroughly disliked company in Washington, D.C., right now.”

“While we strive for consensus and alignment on a lot of policy issues … there are going to be times where running a business and the policy imperatives of our elected officials are not aligned, and so there will be times of disagreement,” Vargas said of the criticism. “We’ll work through those and that’s what a relationship is about.”

Detroit-Hamtramck Assembly was one of the factories where GM said it would end production and not allocate any products. The plant, at the time, built the Chevrolet Volt and Impala, Buick LaCrosse and Cadillac CT6.

The location was spared from closure during UAW labor negotiations in late 2019 and now plays a key role in the automaker’s EV future. GM invested $2.2 billion to renovate the plant, now called Factory Zero, to build all-electric utilities and pickups.

President Joe Biden attended the plant’s opening in November, telling Barra during his remarks: “You changed the whole story, Mary. … You electrified the entire automobile industry.”

“I think she took very seriously the observations I’ve made, and she has been working hard to improve GM’s relationships in Washington,” Dingell said.

Still, Dingell said automakers need to do a better job at communicating with members of Congress about their product plans, “what they’re doing for the workers, how they’re going to help keep the economy strong” as well as understanding other stakeholders’ regulatory and environmental concerns during such a major industry transformation.

“It’s a two-way street,” she said. “We need to understand the challenges they face, and they need to understand we’re trying to protect the American economy and the American worker.”

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