Business has high stake in election

Adam Geller

Tuesday, Nov. 7, 2000 | 11:18 a.m.

NEW YORK -- For executive Heinz Prechter, today's election is about more than choosing the nation's next president -- the results also will shape the future of the U.S. auto industry.

"You've got to be realistic, you cannot be theoretical, and I'm just afraid a Gore administration would be so clever they would mandate everything," said Prechter, chairman of auto parts maker ASC Inc., based in Southgate, Mich., and a major fund-raiser for George W. Bush.

Prechter's view reflects the intense interest of American business in the elections and the tremendous stake for industry in the outcome.

Automakers fear government-mandated deadlines for developing costly technology to make cars more fuel efficient. Pharmaceutical companies are anxious about Medicare reform and prescription drug price controls. For players in the telecommunications market, the election could decide the rules for competition in the local and long distance markets.

Across industries, the focus on the election is particularly sharp because, for the first time in many years, control of the White House and both houses of Congress is being contested with no clear indication of what the outcome will be.

That has fueled a surge in campaign donations from industry. During the 1996 election cycle, donations from business totaled $653.4 million, according to the nonpartisan Center for Responsive Politics. In the current cycle, donations from business climbed to $841.8 million through June 30, and continue to soar, the group said.

"Business wants to make sure that no matter what happens on November 7, they've got friends in Congress who will listen to their concerns in the future," said Steven Weiss, a spokesman for the Center for Responsive Politics.

In most industries, support for Bush is strong, with executives betting a Bush administration will be less likely to regulate commerce or pursue antitrust litigation, and will instead foster a partnership with business. The backing extends to Republican leadership of Congress, viewed as friendly to business.

"We have seen issue after issue where we get a larger number of the R's in favor of our view than the D's," said Floyd Kvamme, a partner in Kleiner Perkins Caufield & Byers, a high-tech venture capital firm in Silicon Valley.

But technology is one of several industries with split allegiances, including some business rooting for divided control of the legislative and executive branches.

One industry with mixed feelings about the candidates is telecommunications. Baby Bell local telephone companies expect a hands-off approach from Bush that would hasten their entry in more long-distance calling markets. But companies seeking entry to local calling markets lean toward Gore, believing government regulation is necessary to pry open access to the networks owned by the Baby Bells.

"If you're someone who wants use of the local networks, you really like the Gore approach," said Rex Mitchell, who tracks the telecommunications industry for BB&T Capital Markets in Richmond, Va. "No matter who's elected, it will be good for some and bad for others."

There's a similar divide in agribusiness, said Bruce Babcock, director of the Center for Agricultural and Rural Development at Iowa State University.

Gore is seen as more likely to intervene in the pricing of grain and other staples, benefitting farmers but hurting big pork producers and others who count on cheap feed. Those major producers also are concerned about antitrust action that might be taken by a Gore administration as the industry continues to consolidate, he said.

But many in farm circles are hoping for a split, with one party in the White House and the other controlling Congress.

"A split is much better for farmers," Babcock said. "The $60 million they received in direct aid in the last three years is the result of a bidding war between the parties to see which party can be more farmer friendly."

The viewpoint is far more one-sided, though, among pharmaceutical companies, who fear Gore would pressure them to justify the cost of drugs and push for Medicare reforms that would cut into profits.

"The last thing the pharmaceuticals industry needs is Al Gore as president," said Hemant K. Shah of HKS & Co., an industry research firm.

The problems would be compounded if Democrats win control of Congress, a change likely to trigger an "inquisition of the drug industry," said Ira Loss, who focuses on health care for the Washington Analysis research firm.

In autos and energy, executives are similarly concerned about a Gore administration they believe would limit exploration for oil in sensitive areas, and impose unreasonable and expensive mandates for fuel efficiency and emissions, analysts said.

But while some industries have made their political leanings clear, others walk a delicate line. The computer industry's political organization, TechNet, is lead by a pair of co-CEOs, one in charge of getting along with Democrats, the other in charge of Republicans.

That approach could be wise, because the outcome Tuesday will likely be so close industries will be obliged to work with both parties, said Nick Sargen, global market strategist for J.P. Morgan's private clients.