By Staff
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 like Toyota and Honda.
As Senate Minority Leader Mitch McConnell said on the floor of the Senate, “it is delusional to think a company spending $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 that would authorize $14 billion in taxpayer money for the nation's automakers, General Motors, 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 funds but did need the money immediately.
While the $14 billion bailout was considerably less than the $25 billion automakers initially requested, it was a plan that did not protect 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 dealerships throughout the country, you are talking about millions of jobs.
During the last several weeks, I have met with the dealership owners in southwest Alabama, and I sympathize with them; however, the plan brought to the floor for vote wasn't the solution.
There is no doubt that these are challenging times for our nation's economy. 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.
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.
Jo Bonner is a member of the house of representatives.