World Motors (WM) is a large U.S. automobile manufacturing company. Eighty percent of its plants and sales are in the United States. WM is considering whether it should hire lobbyists to try to influence a variety of pending legislation. There are bills in Congress proposing to tighten automobile emission standards as part of the clean air laws, laws restricting union activity, increasing worker safety rules, reducing the miles-per-gallon standards on automobiles, and imposing import quotas. WM supports legislation that increases its firm's value. Each piece of pending legislation is evaluated using this criteria. The following briefly describes each piece of pending legislation.

Emission Standards Tighter emission standards increase the cost of cars because they require more expensive emission-control devices such as more precise fuel injection systems and catalytic converters. One of WM's major competitors has a patent on a proprietary fuel emission system that allows cars equipped with its technology to meet the tighter emission standards. WM's competitor can install this proprietary technology on its cars cheaper than WM can install its device required to meet the higher emission standards.

Labor Union Laws Labor laws increase the bargaining power of unions and thus their ability to extract higher pay or benefit concessions or provide lower amounts of work. The pending legislation proposes rules that make it harder for a local union to call a labor strike.

Worker Safety Rules The Occupational Safety and Health Administration (OSHA) is proposing that plants making metal castings (such as automobile engine blocks) be equipped with air ventilation systems that replace the air in the plant more frequently than the current air-quality standard requires. Most of WM's engines are cast off shore, whereas most of its competitors cast their engine blocks in the United States.

Miles-per-Gallon Standards To conserve gasoline, the federal government has mandated that automobiles produced by each company must comply with a minimum miles-per-gallon standard. These standards are met by producing lighter cars with more efficient fuel systems. New rules requiring tighter, more fuel-efficient vehicles are being proposed.
The mix of WM's produced vehicles is very similar to those of its major competitors in terms of car sizes and their fuel efficiency. No auto company has any proprietary technology to improve fuel system efficiency.

Import Quotas Citing the unfavorable trade deficit, the U.S. government is considering regulations limiting the number of foreign cars imported into the United States.
1. For each piece of proposed legislation, should WM support or oppose it?
2. Which pieces of legislation do you expect WM's local labor unions to oppose or support?