Republicans Kill any Help for Detroit

Late Thursday night, Republicans in the Senate derailed a bill, passed the day before by the House, to loan $15 billion to the Detroit Three. The Senate vote was 52 to 35, with 10 Republicans joining 40 Democrats and two Independents in favor.

Sen. Bob Corker, R-TN, after the talks collapsed late Thursday said, "We are three words away," from a deal.

Those words? Most likely, "United Auto Workers."

Republicans are demanding that the UAW accept, in 2009, pay scales, benefits and work rules equal to those of workers in transplant import factories. The union said they will accept all of them, but in 2011, when their current contracts with the Detroit Three, and many supplier companies, expire.

But the "wage parity" question of UAW workers compared to those in transplant factories is not as cut-and-dried as Republican senators may think. There is little in the way of wage and benefit parity among the transplants themselves. And in recent years, industry journal Automotive News reports today, the overseas-based automakers have been pushing wages lower.

These so-called transplant factories, ranging from Hyundai to Honda to BMW to Nissan to Mercedes-Benz and more, are almost all located in Southeast states, many of them with "right to work" labor laws aimed at union-busting and represented by Republican members of Congress and the Senate.

Republicans seem to be looking to score a rare political trifecta:

- First, they've already gotten a pound of flesh from their own failed and disliked president by forcing him to publicly side with the Democrats;

- Second, they see a chance to finally destroy the UAW;

- Third, they're hoping to appear as if they're just sticking-up for their own deeply-held conservative American beliefs.

For example, Senator Mitch McConnell of Kentucky, the Republican leader, trotted-out some of the old bromides, saying Thursday that "a government big enough to give us everything we want is a government big enough to take everything we have."

I can almost hear America's children tonight, "Please check under the bed, daddy, for those UAWs!"

Didn't these Senators take note of the recent election? The vote against hate, political in-fighting and name-calling? The loss of several of their buddies? They're probably betting that their constituents didn't notice. Maybe these representatives have -- once more since Election Day -- outsmarted themselves.

Thursday, one of the Republican senators opposing the loans, said, "The Republicans are trying to save the industry, and the Democrats are trying to save the union."

Senate Majority Leader Harry Reid said he dreads what will happen on Wall Street today, Friday. "It's not going to be a pretty sight,'' he said, that this means "a very, very bad Christmas" for many Americans.

Japan's Nikkei dropped 6% when the bad news hit the market in Tokyo about noon Friday.

Immediately after the Senate vote, the administration was already coming under pressure to act on its own to prop up GM and Chrysler, an idea that administration officials have resisted for weeks. Some say the Federal Reserve may have no choice but to prevent the automakers from bankruptcy proceedings that could have ruinous ripple effects.

In China last week, Treasury Secretary Henry Paulson told reporters that a failure of a major auto company "would not be a good thing" amid current economic distress and said he hoped Congress would "prove successful in addressing this issue."

After the vote Thursday, a Treasury spokeswoman said that Paulson's position was unchanged, and reiterated that the $700 billion TARP (troubled asset relief program) fund should be used exclusively to help the financial sector.

While the representatives from these transplant states clearly see all this as a chance to be conservative heroes and grievously harm the UAW, the transplants themselves have little to gain from a Detroit collapse, and plenty to lose.

Just as the failure of one Detroit carmaker could result in the fairly swift shut down of the other two because of the tentacles between the Detroit Three and all their supplier companies, those same suppliers make hundreds, if not thousands, of parts for the transplants, too. They also use many of the same financial services companies.

Most Asian and European transplants have already reduced their US production and car-building in their home markets, too. Losing a major US parts supplier is a headache they don't want or need.

During a radio interview I gave last night, the host asked, "Has anyone looked into whatever contributions these Republican Senators have gotten from these transplant companies in their states?"

I told him no, not that I knew of, but I thought it'd be a good idea. If anyone reading this wants to get started on such a project, drop me an email (just go to SteveParker.com and you can find the address easily enough).

Starting January 20th, a new President and a bunch of new, fresh eyeballs will be dealing with the Detroit Three crisis. Heck, even if they're old eyeballs, we're familiar with many of them from the Clinton years and know that, at least, they can be trusted to have the nation's needs at heart.

It does seem, at this point, that the $15 billion, if loaned with enough tough ropes, not strings, attached, to keep GM, Ford and (maybe) Chrysler alive until March 31st, when detailed plans for recovery (or failure) would be made public, that's a worthwhile and, these days, negligibly small investment.

Follow Steve Parker on Twitter: www.twitter.com/autojourno

Comments

[funkalicious]

Lets raise the pay of the UAW now that everyone of the big three okay really big two and a quarter are going belly up.

More Money for labor Today not Tomorrow but Today.... UAW workers are not paid enough we should all pay double for a made in USA piece of crap car.

Never mind that management has to squeeze the nickles till they cry and that every supplier has to squeeze every piece of quality out of the car the workers deserve everything they get. Management deserves everything they get even more... the whole bankrupt lot.

You are whining about the taste of the beer after you drank it and pissed it away.

[ajax2]

For the Iraq war and Murder INC. Republicans McConnell and Boehner, have 000.000.000.000000. For U.S. auto makers and workers, $0.

What is the hourly breakdown for the $3 trillion wasted in Iraq?

[ajax2]

Put a cork in it Corker.
How can anyone believe that the Republican opposition is concerned about hourly costs? Look at these numbers,
$700,000,000 handout to Wall Street virtually unconditional.
$3,000,000,000,000 to Iraq @ $12,000,000,000 per month. with billions unaccounted for.

[Michale32086]

You can thank the Democrats for that 700 billion that went to Wall Street...

Michale...­..

[ajax2]

No I can't. The economic crisis was created by the Republican Bush administration. The bailout was created by Republican Bush appointees Paulson, and Bernanke. Republican leaders John McCain, Mitch McConnel and John Boehner all pushed their Republican colleagues to vote yes. A majority of Republican Senators voted yes. In the House 45% of Republicans voted yes. Your statement that, "You can thank the Democrats.­.." is pure right wing misinformation that doesn't pass the smell test.

[nogimmicks]

Good point. I was listening to Corker's speech about the failure of the automaker bailout deal. He actually made a good argument (just one provision, .. a five minute phone call could have solved everthing). The problem is that he had no problem with unconditional, no questioned asked, transfer of 150B to AIG, and now he suddenly he is so careful and particular about 15B dollars? I am not saying that 15B is nothing, it is still 3 times larger than all the money we spent on the cancer research.

[SonofLiberty1]

Of course, you can always apply that to any other Republican who voted for GWB...

BTW , Mr Grinches real name?

George "W" Bush

[SonofLiberty1]

This is exclusively for Republican Senators and Reps who just voted down the bailout for the auto industry..­.it also applies to Religious Clergy who have told their flock we all sinned in voting for Obama:

"You're a mean one, Mr. Grinch.
You really are a heel.
You're as cuddly as a cactus,
You're as charming as an eel.
Mr. Grinch.


You're a bad banana
With a greasy black peel.


You're a monster, Mr. Grinch.
Your heart's an empty hole.
Your brain is full of spiders,
You've got garlic in your soul.
Mr. Grinch.


I wouldn't touch you, with a
thirty-nin­e-and-a-ha­lf foot pole.


You're a vile one, Mr. Grinch.
You have termites in your smile.
You have all the tender sweetness
Of a seasick crocodile.
Mr. Grinch.


Given the choice between the two of you
I'd take the seasick crockodile.


You're a foul one, Mr. Grinch.
You're a nasty, wasty skunk.
Your heart is full of unwashed socks
Your soul is full of gunk.
Mr. Grinch.


The three words that best describe you,
are, and I quote: "Stink. Stank. Stunk."


You're a rotter, Mr. Grinch.
You're the king of sinful sots.
Your heart's a dead tomato splot
With moldy purple spots,
Mr. Grinch.


Your soul is an apalling dump heap overflowing
with the most disgraceful assortment of deplorable
rubbish imaginable,
Mangled up in tangled up knots.....­"

With thanks to Dr Suess who wrote the above in 1957

[Michale32086]

@dragonfur

}}}}}}
It's not a one time bailout. It's a BRIDGE loan, meaning it's intended to keep the car companies going until March. That would give them time to come up with the restructuring plan Congressional Democrats want, and the Obama administration time to come up with ideas to help them stay in business. And, it's just for GM and Chrysler, not Ford, who says they have enough money to keep going through 2009.
{{{{{{{

Ahhhh

So, this 15 billion is simply a DOWN PAYMENT bailout..

With many many more billions coming due down the road..

And, will all THOSE billions save the auto industry and all those millions of jobs???

So, where is the logic in giving all that money if they are just going to fail anyways???

Michale...­..

[research]

work for a hedge fund too?

Betting against gm?

why short are bad.

[research]

WORKERS, Citizens!

cease your whining NOW!

We the GOP Gambling Bankers have ALL the trillions.

Beg us for you pitiful pay.

Kneel before us.

We own you.

Do you see why FDR broke the back of the banker coup.

[harriscrl3]

I hope the word gets out Rethugs hates American car companies and American workers they dont think paying 14 billion dollars to keep 2 million people employed during a recession is worth it. Most Americans think that UNEMPLOYMENT is the worse problem facing this country.

Thank you Rethugs for trying to make it WORSE

Carol

[Michale32086]

And do you HONESTLY think that a one time bailout of 15 billion dollars will be enough to prevent 2 million people from being unemployed?

Honestly???

Michale...­..

[dragonfur]

It's not a one time bailout. It's a BRIDGE loan, meaning it's intended to keep the car companies going until March. That would give them time to come up with the restructuring plan Congressional Democrats want, and the Obama administration time to come up with ideas to help them stay in business. And, it's just for GM and Chrysler, not Ford, who says they have enough money to keep going through 2009.

The 3 million people referred to in the media are not all auto workers. They include all of the peripheral businesses that keep running BECAUSE of the auto industry, such as parts producers.

[ajax2]

CPA estimates $12,000,000,000 a month wasted in Iraq. Stiglitz says total war costs will be $3,000,000,000,000. Money to kill but not to build. Have we all fallen down the rabbit hole?

[VikingQuest]

A company like GM is in no position to compete at a high level all the way from management and products all the way down to UAW labor. Giving them $50 billion is a waste because it only delays the inevitable. The only reasoning I see on here is give it to them because Wall Street got it too. Great, let's compound our stupidty and keep these bailout going.

The myth of saving jobs is a joke too. We could funnel billions into the horse & buggy industry to "create jobs" and "put people back to work" but if the demand isn't going to be there we might as well burn the money. Government can create jobs by doing what I just said but they won't be there long because of the structure.

People act like giving them $15 billion is going to make a difference and save all these jobs. This is just the start and the problems range all the way from the top to the bottom, GM is $62 billion in the hole. I'd rather pay their unemployment for 6 months than pump $100+ billion into them and pay their unemployment benefits in 2 years.

BTW, Republicans don't care if the union people make $400 an hour if they lead to a successful company that DOESN'T NEED BILLIONS IN GOVERNMENT HELP.

[FreetoBme]

Does any one know if the "Big 3" are still making gas guzzling cars/trucks that no one is buying?
If so, we are destroying our economy (I know, it's already destroyed) to help keep an industry alive because no one wants to buy their over priced and under performing products?

[StillAmused]

Not a peep on HuffPo (or nearly anywhere else) about this internal GOP "strategy" memo that was broken on "Countdown" yesterday, 12/12. Tells the whole story, short and sweet.

http://thenewshole.msnbc.msn.com/archive/2008/12/12/1713569.aspx

----------­----------

"From: (redacted)
Sent: Wednesday, December 10, 2008 9:12 AM
To: (redacted)

"Subject: Action Alert -- Auto Bailout

"Today at noon, Senators Ensign, Shelby, Coburn and DeMint will hold a press conference in the Senate Radio/TV Gallery. They would appreciate our support through messaging and attending the press conference, if possible. The message they want us to deliver is:

"1. This is the democrats first opportunity to payoff organized labor after the election. This is a precursor to card check and other items. Republicans should stand firm and take their first shot against organized labor, instead of taking their first blow from it...

"The sooner you can have press releases and documents like this in the hands of members and the press, the better. Please contact me if you need additional information. Again, the hardest thing for the democrats to do is get 60 votes. If we can hold the Republicans, we can beat this."

----------­----------­--

The obstruction by Southern Republicans is nothing more than knuckle-dragging union-busting (while their own taxpayers, along with the rest of us, shell out incentives and tax breaks to foreign auto companies with plants in their states).

Attributing ANY "philosophy" to these dullards is equivalent to attributing "happiness" to a

[VikingQuest]

Maybe if unions like the UAW didn't put all their money and work to take jobs from the GOP they might receive the benefit of the doubt when they need them . . .

This investment is stupid at best and dangerous at the worst. What is the reason no one else will lend GM money besides the government?

Look at their balance sheet compared to say . . . Toyota. GM is $62+ billion in debt and $15 billion would last them a few months then they'll be back for more.

[StillAmused]

"put all their money and work to take jobs from the GOP"?

Take jobs from the GOP?

Maybe, since you're so well-informed, you'll explain precisely what THAT gibberish means...

Then, you can explain what it has to do -- anyway -- with a now-documented political strategy, by a cabal of self-interested hypocrites, to bust the UAW while claiming, to the press, that they're adhering to some greater economic principle.

... or are you perfectly comfortable with pay-to-play, gutter politics when the stability of the U.S. economy hangs in the balance?

[StillAmused]

... fencepost.

[dianhow]

The word is that Bush will give a bridge loan to the big 3...since he does not want to go down as causing a Depression, like Hoover did. Bush's pick, Sec Paulson gave Wall St banks ( fat cats CEO's ) 700 B..and they got it pretty easily.. But when blue collar union workers want a small fraction of that amount as a loan..Sout­hern Repub's say ' Go to hell ' Their mesage is LOUD & CLEAR ..Repubs do not think much of hard working blue collar workers / union employees. They always look out for # 1.. the corporations and fat cats..that is their BASE. Let's let them all know..we are on to their games. THIS time..we will NOT forget..we will remember on the next voting day !!
They want to bust the unions. ONLY 10 Repubs voted to give the big 3 a bridge LOAN...not a bail out..
Note this fact: Toyota, Kia, Nissan etc...all have plants in the southern United states..al­l were
SUBSIDIZED by taxpayers. How does that make you feel ?

[VikingQuest]

Actually Ford bailed out because they said they are better off without government involved.

It is the big 2.

[pjlowry]

If this bailout fails and the big three fall, it's all going to be pinned on Bush and the Republicans since this is still happening on their watch. Odds of the GOP winning Michigan or Ohio ever again in any presidental election will go in the crapper if they refuse to help them out in their most dire situation.

What goes around will come around. You'd think the GOP would have learned that after the last two beatings they just took at the voting booth.

[VikingQuest]

If you blame the big 3's failures on a political party you probably are too stupid to be voting.

The Republicans are the people that forced GM into $62 billion in debt?

[nineteen and eighty four]

Actually, I am blaming the Rethugs since they are the ones who kept pushing bigger vehicles and kept shooting down mileage standards. They even gave tax breaks for people to buy them.
Isn't it the Rethug motto that greed is good?
The unions keep giving concessions and management keeps getting bigger bucks.
Lets face facts letting the Rethugs run the government should be against the law but they ignore the law anyways so what can you do.

[lstl4]

I believe that unions are good, and I have worked in both union and non union jobs. I am not so sure that bailing out the auto makers is a good idea because with the economy the way it is right now, not many people can buy cars, and just from what I have seen, the hybrids are too expensive for my blood. Middle class Americans need a nice stimulus package so that we can start buying again. I think that if we bail out the auto makers, we will be throwing our money away. Americans need to be able to get back on our feet again and the only way this can be done is with a nice stimulus for all of us. I hope Obama sticks with his plan to help Middle America out.

[VikingQuest]

This $15 billion dollar bailout is just the start and a down payment on $100-$125 billion.

[JiminNC]

This is about unions and the auto makers in the south. The republisaurs just wrote of the industrial midwest for 100 years ... and as we all know, winning Ohio was key to republican victory. Let it be written, the Neohoovers have spoken.

[VikingQuest]

Why are the only companies in trouble locked into the UAW?

[StillAmused]

Hmmm... let's see.

Health insurance.

Existing retirement benefit obligations.

Am I getting warm?