Future of auto industry bailout in question
Published 7:10 am Monday, December 15, 2008
By By Jo Bonner
After negotiations over the auto bailout bill collapsed in the Senate last week, it does not appear likely another auto rescue plan will be considered by Congress this year.
Reportedly, talks collapsed over requiring the wages of union workers to be slashed to the same level as those wages paid to nonunion workers at U.S. plants of foreign automakers such as Toyota and Honda.
As Senate Minority Leader Mitch McConnell said on the floor of the Senate, “it is delusional to think a company which spends $71 per labor hour could compete with a company in the same industry that spends $49 per labor hour.”
Earlier last week, House members were given only a few hours to evaluate a bill - written behind closed doors with only limited debate – that would authorize $14 billion in taxpayer money for the nation’s automakers, General Motors Corp., Chrysler LLC and Ford Motor Co.
GM and Chrysler claimed this bailout money would keep the companies in business through the end of March. Ford requested access to the funds but did not expect to need to access the money immediately.
While the $14 billion bailout was considerably less than the $25 billion the automakers initially requested, it was an irresponsible plan that ultimately did not protect the American taxpayers or help the Big Three automakers get back on their feet.
Without question, the domestic auto industry is vital to our nation’s economy - when you take into account the auto suppliers and all of the dealerships throughout the country, you are literally talking about millions of jobs.
During the last several weeks, I have met with the owners of car dealerships from southwest Alabama, and I sympathize with them; however, the plan brought to the House floor for a vote was not the solution.
There is no doubt that these are challenging times for our nation’s economy - probably the worst most of us have experienced in our lifetimes. Over the past several months, we have seen giant companies fail, significant job losses and crumbling credit markets, all threatening our nation’s economy.
Some have questioned how I could be supportive of the financial rescue plan passed by Congress in October and not be supportive of the auto bailout plan.
Friends, there is a fundamental difference between the two. The financial rescue plan was intended to rescue the entire economy; the collapse of our financial markets would prove disastrous to every American’s well being. The auto bailout is intended to save only one industry.
Throwing $14 billion at the domestic auto industry now would only delay the inevitable. Instead of helping the American auto industry become competitive again, this plan would only foster a system of dependency; in a few months, we would be right back where we started - only with even more industries lined up looking for their own bailout.
It appeared late last week that the White House was considering providing emergency aid to the Big Three automakers - but it was still unclear whether the aid would be provided from the Troubled Assets Relief Program (TARP), the official name of the Treasury’s financial rescue program, or some other source.
Mobile Artist’s Ornament on White House Christmas Tree
To showcase all 435 congressional districts, First Lady Laura Bush invited Members of Congress to select an artist from each of their districts to decorate an ornament for the official White House Christmas tree.
I chose renowned Mobile artist, Eugenia Foster, to design an ornament to represent Alabama’s First Congressional District. Eugenia has received awards in regional and national exhibits, and her work appears in galleries throughout the Southeast.
With a camellia, Mardi Gras float, oak tree, and the Alabama flag, Eugenia’s ornament embodies what makes Alabama’s First District so special.
I am proud that the more than 60,000 visitors to the White House this Christmas season will see our beautiful ornament on display in the Blue Room of the White House.
My staff and I work for you. If we can ever be of service, do not hesitate to call my office toll free at 1-800-288-8721 or visit my website at http://bonner.house.gov.
Jo Bonner is a U.S. congressman. His column appears weekly.