Oklahoma Senators Tom Coburn and Jim Inhofe speak out against automaker bailout
Just when it looks like the bailout for the Detroit automakers may have stalled, the United States Senate is negotiating into the night, trying to hammer out an agreement that would give the automakers $14 billion in emergency funding. From The Associated Press:
Labor, lawmakers and the auto industry bargained in unprecedented private talks at the Capitol Thursday night, claiming progress in a common struggle to salvage a $14 billion government bailout of the nation’s Big Three carmakers.”We’re closer to agreement,” Senate Majority Leader Harry Reid of Nevada said after several hours of negotiations.Officials said the talks centered on possible wage and benefit concessions from the United Auto Workers union as well as large-scale debt restructuring by General Motors Corp. (GM), Ford Motor Co. (F) and Chrysler LLC.It was not clear how far the participants were willing to go to seal the federal aid that General Motors and Chrysler said was essential to keep them from bankruptcy. Ford is in better financial shape than its rivals, although its survival is not assured, either.
The developments unfolded after Senate Republican leader Mitch McConnell of Kentucky joined other GOP lawmakers in announcing his opposition to a White House-backed rescue bill that was approved by the House a day earlier. He called for an alternative that would reduce the wages and benefits of U.S. autoworkers to bring them in line with those paid by Japanese carmakers Nissan, Toyota and Honda in the United States.
To be honest, I will be very surprised if our distinguished members of Congress do not come up with some kind of compromise that allows the bailout to go forward. I hate to sound so pessimistic, but from looking at their past actions, I fully expect that to be the case. That is exactly what happened in the case of the original $700 bailout of Wall Street, opposition at first, compromise at the last.
I must say also that I am proud of the Senators from my home state of Oklahoma, for standing up and raising their voices in opposition to this bailout. Tom Coburn first voiced his concerns back in November, publishing a letter on his Senate website. Jim Inhofe gave a speech on the floor of the Senate today, spelling out his numerous concerns about what he calls “irresponsibility”.
“In Congress, we are currently considering an irresponsible $14 billion bailout of the Big Three auto manufacturers,” Senator Inhofe. “This legislation empowers one unelected bureaucrat, which has come to be known as the ‘car czar,’ to spend money how he sees fit to keep the auto companies afloat and make the U.S. government part owners of the companies.“There are no provisions in the language that specifically direct the car czar to take any specific restructuring actions, such as renegotiating union contracts which has led to nearly a doubling of the cost per worker for the Big Three auto makers compared to their foreign competitors here in the U.S. The ‘car czar’ will also be empowered to dictate how these companies are to structure and run their business. This is a bureaucratic, command and control approach to industrial policy in lieu of market forces and Chapter 11. I believe it only delays critical business restructuring decisions.“Why do we now believe that government bailouts and government ownership of shares of these companies without a clear idea of what these companies will do to significantly alter their business models, at least until well into next year, is going to be a successful venture? The history of even the last couple decades clearly shows that the approach we are considering in this legislation has a track record of waste and failure. We need to ask ourselves: Are we not simply throwing good money after bad? More importantly, are we not simply throwing taxpayer dollars down the drain?
“I cannot and will not support Congress using taxpayer dollars to bailout yet another industry, and I think we were in this same situation not too long ago with the massive $700 billion financial bailout legislation. This Congress has set an extremely dangerous precedent.
“This has been and will continue to be a difficult time for all Americans. The unwinding of past mistakes is never a pleasant process. These auto companies have very difficult decisions to make, but no one can argue these circumstances and subsequent tough decisions have been a long time in the making. However, many of us believe additional government attempts to only patch the situation for the moment will not only be futile, but will also move this country further from those first principles that have made us the great nation we are today.”
Stop and think about what Senator Inhofe has pointed out. Congress is wanting to give one unelected person the power over General Motors, Ford Motor Company, and Chrysler. That person will be able to veto spending and to basically control how the three automakers conduct their business. Is that amount of power safe in the hands of an unelected official? He doesn’t seem to think so and I tend to agree. Sooner or later, these companies, along with the United Auto Workers Union, are going to have to make some hard financial decisions. It’s time to stop the bailouts because giving $14 billion to Detroit is only delaying the inevitable.
That’s my take!
Larry
Thanks for letting the foreign automakers open shop in the US with free land and tax incentives so they can provide lower wages for Americans and take huge profits out of the US back to Japan & Korea.
I don’t have a lot to say about the foreign automakers opening shop in our country, except for this. They are not the problem with Detroit. Between the Big Three automakers and the UAW, they have created a no win scenario. They have made their bed and now they are going to have to sleep in it.
NEW YORK (Associated Press) – Ford says it will offer employee pricing, zero percent financing and cash incentives on a variety of its vehicles. The Dearborn, Mich.-based company’s move comes amid a continued industry wide drop
Too bad Inhofe feels differently about cutting executive pay than he does about cutting the wages of union workers. Inhofe this week on the $500,000 cap on executive compensation for firms receiving TARP funds:
“Do we really tell people how to run [a business], and who to pay and how much to pay?”
If you make a couple of million dollars a year, the answer is no. But if you belong to a union the answer is yes.