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Toyota’s Lobbying Blitz Gets Results in Manchin-Schumer Deal

·5 min read

(Bloomberg) -- Toyota Motor Corp. is mounting an aggressive push to make itself a more influential player in Washington, dramatically dialing up its lobbying spending and building cozy relationships with crucial lawmakers such as Senator Joe Manchin.

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On Wednesday, those efforts appeared to pay off, as an electric-vehicle tax credit extension the company had championed made it into a $369 billion climate and energy package revealed by Manchin and Senator Chuck Schumer.

The deal calls for continuing a $7,500 credit for the purchase of new “clean cars,” a priority the Japanese automaker has been fighting for alongside its domestic rivals General Motors Co. and Ford Motor Co.

Read More: Senate Deal Includes EV Tax Credits Aimed at Spurring Plug-In Market

For Toyota, though, this win has particular significance: In the Build Back Better legislation that fell apart last year, President Joe Biden had called for an EV credit that would’ve provided extra incentives on union-made cars, a benefit for the Detroit heavyweights that rely on organized labor.

The current tax-credit measure -- while hardly a sure thing to be signed into law -- eschews providing a similar advantage.

In 2021, Toyota spent $6.2 million on US lobbying efforts, according to the OpenSecrets research group, a 41% increase from the $4.4 million it spent in 2010. That sharply outpaced growth of lobbying spending on the auto industry overall, which rose 26% over the same period.

Stephen Ciccone, Toyota’s Washington-based group vice president of government affairs, said the company’s large West Virginia presence -- which includes about 2,000 jobs at a sprawling manufacturing facility -- has been helpful in getting Manchin’s attention.

But courting Manchin is just one part of his more far-reaching campaign to advance the company’s interests. Ciccone has made a point to regularly escort Toyota’s American executives, dealers and rank-and-file employees through the corridors of power for meetings with lawmakers and administration officials. That’s a significant shift for a company that for years kept a low profile on Capitol Hill and deferred to industry trade groups to speak out on policy matters.

“When I joined Toyota, the attitude was that we were a guest in the country,” Ciccone said in an interview, noting Toyota boasts 11 plants, including a planned battery factory in North Carolina, and 40,000 employees in the US. “The attitude was ‘we’re the visiting team,’ when really we’re as much of the home team as anyone. That’s how we approach government engagement now.”

Full-Court Press

Ciccone’s full-court press was born out of a public-relations crisis. The company saw the downsides of a hands-off approach after its president, Akio Toyoda, was hauled before Congress and grilled about unintended acceleration in its vehicles, a problem that forced it to recall more than 10 million vehicles worldwide and pay $1.2 billion in US penalties.

“We had a tight relationship with our customers and retailers, but we didn’t really have a robust relationship outside of that inner circle,” said Bob Carter, a former executive vice president of Toyota’s North American business who retired at the end of June. “We didn’t have that deep of a relationship with the government or media.”

As part of the efforts to restore Toyota’s name, Ciccone came aboard in 2011 from Eastman Kodak. He cuts an unusual figure in a town known for staid fashion choices.

“I don’t know any other [male] lobbyist who wears their hair in a ponytail,” he said. “In a sea of middle-aged white guys, it helps me to stand out.”

Ciccone set about crafting a strategy that included more engagement, such as those employee trips to meet with members of Congress. Toyota executives “lobby me to be included in our fly-in, to take three days out of their busy jobs to spend time in Washington,” he said.

His approach was rewarded in November, when Manchin -- a crucial vote in a deadlocked US Senate -- came out against a measure that would have offered $4,500 more in tax credits for the purchase of an electric vehicle made in the US by union labor.

While attending an event at the West Virginia Toyota plant in celebration of a $240 million investment in a new production line, the senator criticized the tax credit as “wrong” and “not American” – a decree that effectively killed it.

Manchin’s office declined to comment on his relationship with Toyota.

Toyota employed 33 lobbyists in the US in 2021, according to OpenSecrets, fewer than the 44 it had on staff in 2010 when the public-relations firestorm around the recall was in full swing.

But it is now more of a spending powerhouse, dropping far more dollars on lobbying than key rival Ford or major trade groups like the National Automobile Dealers Association. GM remains the sector’s lobbying heavyweight, with $10 million in total lobbying expenditures last year and some 89 lobbyists in its tent.

The company is also the only international car manufacturer with an employee political action committee, which can donate directly to US political candidates. It has raised $1.1 million and spent $1.2 million thus far for the 2022 election cycle. It briefly paused making contributions to lawmakers who objected to certifying the 2020 presidential election and has drawn criticism for resuming donations to such candidates’ coffers.

‘Very High Stakes’

John Bozzella, chief executive officer of the Alliance For Automotive Innovation, said companies such as Toyota frequently shift positions depending on what is dominating the agenda in Washington at the time.

Bozzella, whose alliance represents companies such as Ford, GM, Stellantis NV, Honda Motor Co., as well as Toyota, said automakers are heavily invested in Washington lobbying because the industry is on the verge of transitions to electric and self-driving cars, areas where lawmakers are crafting new policies and regulations.

“We’re at the end of a 50-year cycle, and at the beginning of a new 50-year cycle,” he said. “There’s very high stakes, because policy can and will impact that transformation.”

Those profound changes promise to add fresh complexity to Ciccone’s job.

“We don’t go looking for a fight, but we won’t back down from one either when our team members’ interests are at stake,” he said.

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