Levin: Bush Won't Allow Big 3 To Collapse

(CBS)  Three Senators said this morning that, despite the recent failure in Congress of a package of loans to Detroit automakers, President Bush will not likely allow the Big Three to collapse - although when action will be taken by the administration is still unclear.

Sen. Carl Levin, D-Mich., said that after the car giants (General Motors, Chrysler and Ford) warned that they were in financial peril, the reverberations of which would be felt across the economy, the White House has acknowledged it will be "irresponsible" not to help.

"By the way, no other country that produces automobiles is allowing its industry to collapse," Levin told Face The Nation host Bob Schieffer. "They all have the same problem. They're all providing loans to those industries. This [problem] is not unique to the United States.

"Even the Chinese auto industry is asking the Chinese government for loans."

Levin said that the House bill to provide $14 billion in loans to the Big Three was acceptable to Senate Democrats and the White house, but was shot down by Republican leaders in the Senate who insisted on wage restrictions (to be specified by law) limiting auto workers to what foreign manufacturers like Nissan pay American workers. "That is what broke this deal," he said.

Sen. Sherrod Brown, D-Ohio, another state with a large auto industry base, said he was optimistic that the administration would do something significant to meet the situation. "I don't think the White House wants bankruptcy at one of the big three auto makers as part their legacy," he said.

(CBS)

Brown (left), who has proposed using part of the Treasury's TARP money (the $700 billion which Congress approved to help steady financial firms), said a top White House advisor told him Friday morning that there was "good news" coming, but wasn't specific.

He also hoped that the sacrifices felt would be shared equally among all parties - management, creditors, investors and labor.

"Senator Corker and I sat on the Banking Committee and listened to testimony from the three CEOs, the United Auto Workers, the top executive at Johnson Controls, a major auto supplier, and a supplier and a [car dealer] from Connecticut," Brown said. "Each of them is willing to give something up, as the bond holders are. And we don't want to put this just on the workers. That has really been the calls from too many, I think."

Sen. Bob Corker, R-Tenn., was also on the panel and said he hoped, if the White House does proceed with its own bailout via TARP funds, "that they'll put in place exactly the same concepts that we almost agreed to the other night."

Those would include oversight about the use of funds,

(CBS)

Corker (left) suggested that, because the White House has the funds and the ability ("with the flick of a pen") to rescue automakers with TARP money, there was less impetus on the part of stakeholders to come to a mutually-acceptable agreement: "[UAW] knew that the White House had funds that they could put forth without any strings."

Brown said bankruptcy or failure of any of the Big Three would be unacceptable. He recounted a conference call 35 auto dealers from his state. "They are very fearful of what would happen with a bankruptcy, because they think that people simply would stop buying from a company, at their dealership, a company that might go under a year or two years or five years from now, that they just couldn't trust for service, for parts, for all the warranty and all that.

"It would be a terrible thing for the economy, for the confidence in the economy, for literally hundreds of thousands of jobs in my state, suppliers, many auto workers, retirees, what would happen perhaps to their pensions, perhaps to their health care, and the literally tens of thousands of people that work in dealerships in my state," Brown said. "Multiply that across the country."

Also on the program, Schieffer invited Illinois Attorney General Lisa Madigan and Michael Eric Dyson of Georgetown University to discuss disgraced Ill. Gov. Rod Blagojevich, who is facing calls for his resignation and impeachment in the wake of a federal indictment charging he was "selling" Barack Obama's vacant Senate seat.

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Read the full "Face the Nation" transcript here.

[craigh9]

I believe placing restrictions for this money on labor is appropriate - HOWEVER, it should be stipulated that significant cuts MUST be made from management as well. The goal needs to be reduction of expenses to the point that allows a full 20% reduction in the cost of todays automobiles - then and only then would the public consider purchasing the exisitng fleets under the possibility of collapse by these companies and allow proper restructuring of the Big 3 for future stability.

[medwar37]

hitoyou11

Definitely the money go only to the workers. The UAW had taken enough, they don''t deserve anymore.

[hitoyou11]

He should.

[medwar37]

People can use the $100,000 from the bailout to pay off the debts that were accrued because any extra money that was saved were used to pay high gas prices, high food cost, and high utilities. That is one of the reasons people aren''t buying anything to help the economy is using every extra penny for necessities, like food, gas, extra. So if we do give the big 3 the money, no one is going to be able to afford to buy one of the high price cars.

[medwar37]

I think the government should give the working american people at least $100,000 from the 700 billion dollar bailout. It is our money and we deserve a part of it as well.

[smurfcrusher]

It astonishes me that, after all we have seen over the last eight years, anyone would still underestimate Bush''s stupidity.

[downtowner97]

The big three are going to miraculously turn around and start making a profit because they got a handout? This is a very temporary fix at best. Who''s going to buy their cars and trucks in this economy? The banks are going to have to open car lots to sell all the repos.

[jsd330]

where do we sign up for those "underpaid" auto worker jobs ??
posted by firehose
you are about 10 years to late. I don''t think the big three has been doing any hiring since the late 90''s. Now you can go to alabama and work for one of the foriegn automakers, I hear they have to import employees since they can''t get enough qualified people from alabama.

[runningralph]

President George W. Bush will go down in history as the Liberator of Iraq and Afghanistan, Champion of Democracry, Great Helper of Africa, and now with this bailout, Saviour of Labor Unions.

[rickwar]

"Levin: Bush Won%u2019t Allow Big 3 To Collapse"

BS, Bush doesn''t give a ***. He''s packing, he''s toast, his "legacy" is the disaster we see playing out in front of us now both overseas and at home.

The Republican senators don''t give a *** either, their main concern, re-election.

While they sit around offering platitudes, the collapses continue.