WASHINGTON, Dec. 17, 2008
White House Auto Bailout Plan In Neutral
Pressure Mounts Over Administration's Promised Rescue Package For Ailing Industry
-
Photo
A week after Congress failed to reach consensus on a $14 billion aid package for struggling General Motors Corp. and Chrysler LLC, several lawmakers pressed for an array of terms and conditions in any deal crafted by the White House, complicating matters. (AP Photo/Gary Malerba)
-
In-Depth
Q&A: Big Three Bailout?
Why Detroit's automakers might get a rescue package
"We're trying to do something that's responsible," White House press secretary Dana Perino said Wednesday. A day earlier, Perino was blunter: "We are not going to be rushed into it."
As President George W. Bush's advisers ponder a rescue deal for the auto industry, the administration faces competing pressures from lawmakers in different congressional factions as it reviews its options for a bailout.
Conservative Republicans implored the White House not to use money from the $700 billion bailout for the financial sector to aid carmakers. A leading House Democrat, meanwhile, said the government should secure veto power over the companies' business decisions as part of any aid.
On Monday, President Bush suggested that a bailout package would come sooner rather than later. "An abrupt bankruptcy for autos could be devastating for the economy," Mr. Bush said. "This will not be a long process because of the economic fragility of the autos."
However, that same day, Perino tempered those comments, saying the administration wanted to hear more from all those involved, including key lawmakers and those in the industry. She said concessions need to be made in exchange for a rescue package that reportedly could reach $15 billion for General Motors Corp. and Chrysler LLC.
"I don't know of an imminent announcement coming from us," Perino said, suggesting that expectations for a quick decision were premature.
But a week after Congress failed to reach consensus on a $14 billion aid package for struggling General Motors Corp. and Chrysler LLC, several lawmakers pressed for an array of terms and conditions in any deal crafted by the White House, complicating matters.
Conservative lawmakers, many from Southern states that are home to Japanese auto plants, asked Mr. Bush not to use the $700 billion Wall Street rescue fund, known as the Troubled Asset Relief Program, to help the U.S. carmakers.
"Congress never voted for a federal bailout of the automobile industry, and the only way for TARP funds to be diverted to domestic automakers is with explicit congressional approval," wrote 26 GOP lawmakers, led by Rep. Jeb Hensarling of Texas.
Seven Senate Republicans led by Sen. Jim DeMint of South Carolina sent a similar letter saying that without restructuring, "we do not believe any amount of money will succeed in saving these companies."
Rep. Barney Frank, D-Mass., urged Treasury Secretary Henry Paulson to adopt the accountability provisions included in a House-passed auto bailout bill - the product of a deal with the White House - as a condition of any bridge loans to automakers.
The measure would have given a Bush-appointed "car czar" oversight over any major business decisions by the automakers while they were taking advantage of federal aid, including the power to veto any transaction of $100 million or more.
"Given the serious mistakes that senior auto industry executives acknowledge they have made in the past, such safeguards are absolutely necessary to ensure that taxpayers are protected and that the retooling of this critical industry proceeds as quickly as possible," Frank wrote.
The White House and Treasury Department were in talks with Sen. Bob Corker, R-Tenn., who has been seeking big union concessions in exchange for rescue money, on the terms and structure of a possible bailout, said a senior GOP congressional aide.
Corker came close last week to striking a deal with the United Auto Workers union for a $14 billion bill that would have forced the carmakers to bring their wages and benefits in line with those of Japanese auto companies in the U.S. by a specific date in 2009. The measure collapsed after the UAW refused to agree to wage cuts that quickly as Senate Republicans demanded. The new contacts with the administration were disclosed on condition of anonymity because the congressional aide was not authorized to divulge them.
GM and Chrysler have said they will run out of cash within weeks if they don't get help. Ford Motor Co. has said it has enough cash to survive 2009.
"I don't think that there's any possible way that this president would agree to allow taxpayer financing to go toward firms that are not willing to make tough decisions to become viable and competitive in the future," Perino said.
Mr. Bush said Tuesday that his administration was "considering all options" for helping the automakers. He said the already distressed economy could slide further into recession without prompt action.
"What you don't want to do is spend a lot of taxpayers' money and then have the same old stuff happen again and again and again," Mr. Bush told CNN. At the same time, he said, "we're trying to get this done in an expeditious way."
Options under consideration by the Bush administration include using part of the $700 billion fund to provide loans to the carmakers or using money from the fund as collateral for emergency loans to the automakers by the Federal Reserve.
© MMVIII, CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.
Video and Galleries from U.S.
-
Video
Kidney Transplant Chain
-
Video
Taxing The Rich
-
Video
Cash For Clunkers
First and foremost, get rid of the UAW. Hire the workers back under a new company. As for the retired members getting a pension...there''s always social security and Obama''s new health plan.
GOP - GANG OF PHELONS!
We all know that bailout money will end up as bonuses in top managements'' pockets. They''ve been so outrageously greedy for so many years, they have no clue how to be otherwise.
The GOP in the South is in the pocket of FOREIGN AUTO COMPANIES who are being bailed out by their own governments while they get HUGE TAX SUBSIDIES from the southern US states.
The GOP in the South is full of traitors who are CASHING IN from foreign auto companies while advocating the destruction of American industry.
The GOP in the south will not be happy until American workers make minimum wage or less in foreign auto manufacturing sweat shops. Once they kill the unions, the foreign auto companies will no longer have to hold up their wages to keep the unions out. Wages will drop everywhere and the GOP in the South will get more "donations" from their FOREIGN MASTERS. Traitors.
This is the "big lie" spread by Fox News and the lunatic Right- "$70 and hour" or $50 an hour". It''s a LIE. An independent automobile MANUFACTURERS group, Center for Automotive Research, study shows that Auto workers average $28 an hour. TWENTY EIGHT. That''s TWENTY EIGHT DOLLARS. Can you idiots spell that?
Toyota workers in Kentucky make $27 an hour. Honda workers in Ohio make $30 an hour. The GOP is LYING.
The higher hourly numbers are fabrications (LIES) made up by the GOP and their anti-union business interests. Their real goal is to break unions, return to the 1920''s where people were paid slave wages to work 12 hour shifts in dangerous jobs, and get everyone else working for MINIMUM WAGE. All so they can make more money.
$50 is a LIE. $70 is a LIE. $28 is CORRECT.
The UAW would have the American auto industry collapse, rather than give up one penny of excessive, non-competitive salaries and gold-plated health benefits - that are provided even to non-working union members (which is probably the majority.)
This CANCER must be eradicated, before it kills the patient.
Don''t worry GOP we know this just like the lie about union wages. It is a lie the contract is 27.81 per hours. Any other wages would be subject to court and legal constraints.
Hey GOP I see another blood bath in 2 years if you continue down this course. We American have awaken and are not happy with you.
I take it that loseing 50 seats in congress and 14 seats in the senate in 2 elections was not enough to send you a wake up call. So maybe we should up it to 70 and 30 in the next election.
I wonder if they will be dumber than dirt.
Posted by antoniof123 at 03:20 PM : Dec 17, 2008
Oh No, don''t bust the unions!!!! How in the world will our uneducated, unmotivated, and civilly ambivalent citzens make $80,000 a year, hardly pay anything for their benefits, and be able to retire at 95% of their pay - HOW CAN ANYONE EXPECT TO LIVE ON SO LITTLE.
The UAW deserves to be dumped - and if it can be arranged for the public employees unions and the education units to be blown up too our country would experience an extremely speedy recovery. These unions have sucked the country dry (with the aid of idiot management) and they need to be CRUSHED!!!
I can tell at who''s feet you stretch.
Posted by g1000 at 04:18 PM : Dec 17, 2008
The White House is giving us a snow job. The "Big Bosses" of the "Big Three" are part of the scam. They don''t want government help. They want to get rid of the union worker. They want to go bankcrapt. I don''t believe they didn''t see it coming for some time ago. Now, all in the sudden, they need help or they will shut downd by the end of the month. Are we that dumb to believe this?
[Posted by nikosk11 at 04:22 PM : Dec 17, 2008]
they''re lying to make their case ... the case that uaw workers make ''way more'' than everyone else ... and because of this they shouldn''t get any help.
there are no uaw workers making $70/hr ... and there are no uaw workers making anywhere near that. the $70/hr wage includes direct labor (about $28), benefits for current workers (about $10), and the pension and medical benefits for all retired workers or their survivors (the diff between roughly $38 and $70).
if there really was such a difference ... then the uaw would have no problem getting into the japanese plants in the us and getting those workers the higher wage.
Lame Duck...
Qvack Qvack...
Posted by safe11 at 07:34 PM
These are the same people who tried to create a sob story for Joe the Plumber. You remember the fake "Joe" who supposedly was afraid of earning more than 250,000? Poor Joe! He''s just a regular Joe who earns more than 21,000 a month and is afraid of paying taxes. Yep. But people who earn far less than that, they just want to pizzz on.
posted by craig9
Here we go with another lie, tell me where you found or heard that BS from. Or was it that you are so anti union you lay awake at night and dream this stuff up. The UAW retirement plan is about the same or maybe even less then the governments, teamsters, construction workers, steelworkers,to name a few. AS for undereducated how many autoworkers do you personally know?
There might be quite a few who have more education then you do. And since when in a free market society is it anybody''s right to dictate salarys? I know there are plenty of people that make more then I do have less education and do a lot less work, so what good for them. Is it fair ? Thats the way our society works.
Then let them compete in the free market.
I thought the whole point was that they tried, and blew it.
--------------------------------------------------------------------------------
Posted by jsd330
No. I say we share your wealth and all the wealth across the board. No one should make a dime more than anyone else...s.crew education and hard work and persistance. Let''s make everything fair for everyone. Why should people who blindly have 4 kids on less than $30,000 a year have to do without all the perks that people who plan and prepare for the same number of kids so they can support them ON THEIR OWN? Fair. That''s what made this country. G.od bless the party that makes sure idiots and under achievers stay even with those who sweat, plan, and sacrafice to get the things they want in this life.
If there''s no buyout then the Big 3 will likely go bust, and the "newbies" will still gain entry into the U.S. market. Even Toyota supports the bailout, because the newcomers will bring cheap cars that makes it harder for them to compete. They will likely pay employees less than Toyota or Honda. Or more likely, they are really only buying the U.S. brand names and ship the cars from their home country where labor is much, much cheaper.
Who cares, you might say. Well with the Big 3 gone the other automakers with plants in the U.S. will likely be forced to pull out and find cheaper labor elsewhere in order to compete with China and India. The destruction of the American manufacturing sector will be nearly complete, and a service economy will emerge (think "want fries to go with your burger?").
Posted by likeitis5050 at 08:52 PM : Dec 17, 2008
You got that right. I worked hard to raise my credit score, save a 10 percent down payment & pay off credit debt all to be elligible for a mortgage equal to 25% of my yearly salary at a low fixed interest rate.
Now people who did none of those qualifications are being given new mortgage terms equal to mine.
I should start buying Nike shoes, go out for dinner every night, buy a nice boat & just drink away my mortgage payments for a while. Then maybe I would become eligible for even better mortgage terms through the good ole USA!!!
Let the big three find out what they did wrong, correct the problems, start next year.
I would buy a new car if it were not for
1. Obama
2. Bailouts
3. Taxes (California or Federal)
4. I actually liked the cars.
5. UAW
6. Bush
Oh! in ref to calif the state leader are trying to add a 39cent take per gal of gas. Instead of fixing the budget problem and tightening the ''way'' overspent belt they will again fix the problem on the over taxed backs of the working middle class.
Posted by likeitis5050 at 08:44 PM : Dec 17, 2008
And it continues on. Partsian politics from your viewpoint is the way to pursue everything. And this is partially why things are so screwed up. The Republican focus on war, the Democrats focus on peace; the Republicans focus on religous legislation, the Democrats focus on liberty, equality and tolerance; the Republicans focus on free unregulated enterprise, and the Democrats focus on redistribution of wealth and proper education.
These ideas are not mutally exclusive to their respecitve idealogies. And besides, the UAW didn''t kill the bill, they don''t have the power to do that. It was the Senate Republicans that killed the bill, they have that power.
The voice of reason. And how does the government enforce restructuring. This is market forces that make restructuring a necessity; but these industries have been insulated from market forces due to tax credits and slack government regulation on mileage performance. They don''t have to compete, they are beyond reproach. W. Edward Deming would be incredulous at our American lack of commerce and process improvement to meet better benchmarks in quality (if he were alive today).
Throwing good money after bad has become the status quo for our mentally challenged corporate leaders. American ingenuity needs to make a come-back. And we need to make it happen now.
Posted by incog-nito at 01:37 AM : Dec 18, 2008
I find myself agreeing with most of your posts, however I want to pose a tangent concept on this point. We have done so much in the name of National Security, that is has become self defeatist. And beyond that, we really don''t finance our own national security, other countries are buying our government securities, and in some they are participating in our security--so having protectionist trade-policies will also be self-defeatist.
Soooo, if this point were really necessary pursuant to our American interests, we need to start gearing up for World War III, because victory over others is the way we can enforce our way of life in a world economy such as we have now.
Posted by Grandesign at 01:54 AM : Dec 18, 2008
Well, I believe the real wars that are being waged now are on the economic front. And, as the points in your post indicate, we are wittingly or unwittingly helping the enemy. However I don''t think some protectionism is defeatist. Other countries embrace "free trade" right now because it''s beneficial for them, at our expense. They "protect" themselves in other ways, such as currency manipulation and export subsidies. As I mentioned, we simply cannot compete on labor costs alone, but that''s exactly what we''re doing, and losing badly at it. Why enter into trade agreements that are clearly detrimental to our interest? Makes no sense. Until you realize the people who benefited from them are certain private interests with big political contribution coffers.
Scripture tells us that "the labourer deserves his wages" (Luke 10:7).
It is amazing how the Lord reveals Himself to such an unworthy soul. I will never unstand it.
In any case, whatever happens, the executives have nothing to worry about. As business works, executives ALWAYS can find a job, regardless of previous incompetance or outright criminality. Meanwhile, workers receive the shaft regardless of previous history.
This has been true since before the Egyptians became a civilization. It will continue to be true until time ceases.
Replace the top execs with proven business leaders not a stupid government nerd czar.
[Posted by Stacy863 at 06:30 PM : Dec 17, 2008]
they''re called ''authoritarian followers'' ... described in detail here:
http://home.cc.umanitoba.ca/~altemey/
[Posted by Grandesign at 01:45 AM : Dec 18, 2008]
and there''s no better opportunity than now to do that. instead of viewing the assistance the auto industry as a ''bail out'' ... it should be framed as an ''opportunity'' to direct their energies toward the future ... and a more appropriate business model for that future.
if the govt is assisting them financially ... it''s in a better position to define the key criteria for how the business should be run ... and the products they chose to produce.
if there were real leadership (in the us govt) there would be an integrated plan to support these industries ... promote efficient use of resources ... incentivize individuals away from wasteful practices and toward conservative ones via the tax code ... and define a long term plan for us competiveness around the world.
... and claiming ''let the free market take care of it'' is not anywhere near the level of leadership required.
-
by koyt1
December 18, 2008 5:24 PM PST
- Could have had a deal, but the UAW refused to agree with wage cuts. Better to have no job than to agree to a wage cut? Makes UAW sense.
-
Reply to this comment
-
See all 44 Comments