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.
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,
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
Read the full "Face the Nation" transcript here.