- The Washington Times - Thursday, December 4, 2008


The president of the United Auto Workers said the union is willing to revamp its contract to pressure Congress on a $34 billion federal bailout loan for the crippled industry, as Big Three executives prepared to resume their case in Washington on Thursday.

But the appeal faces massive customer resistance in Congress, where many lawmakers are finding little public support for the bailout of General Motors Corp., Ford Motor Co. and Chrysler LLC.

“The public mood, which I saw when I traveled the state recently, is very much against bailouts,” said Sen. Arlen Specter, Pennsylvania Republican. Nevertheless, he said in an interview on Fox, the notion of a partial failure of such a large industry would be too serious to allow public sentiment to solely decide.

In Washington, Rep. Tom Price, Georgia Republican, said he has not budged from his opposition to an auto industry bailout and his constituents are backing him.

“All they see is the government printing money and obligating their children and grandchildren to a greater debt,” Mr. Price said.

A CNN/Opinion Research Corp. poll released Wednesday found that 61 percent of those surveyed opposed federal aid to the car companies. Even in the companies’ industrial Midwestern base, 53 percent said they did not support a government aid package.

Hoping to sway public sentiment, UAW leaders from across the country held an emergency meeting Wednesday.

UAW President Ron Gettelfinger emerged from the meeting to say the union would rework a retiree health care trust fund, eliminate the union’s maligned jobs bank program - which Mr. Gettelfinger dubbed a “lightning rod” for criticism - and cut additional measures that would loosen the union’s trademark job-security protections.

“We’re going to make modifications; we’re not opening the contract, if you will,” Mr. Gettelfinger said at a news conference at Detroit’s Renaissance Center, the corporate home of GM.

Brian Fredline, president of UAW Local 602 in Lansing, said the union agreement amounts to members doing what it takes to “extend an olive branch” at a stressful time.

“We must send a message to the Hill that we are partnering with corporate America in sharing the pain because we understand the stakes are way too high.

“It wasn’t as bad as I thought it was going to be,” he added. “It could have been wage and benefit cuts, plant closings, dire circumstances and drastic reduction, but it wasn’t that.”

Under the original agreement for the health care trust fund, the automakers would initially fund a portion. But General Motors, Ford and Chrysler lack the resources to come up with the $49.6 billion share of their funding.

The trust was to begin Jan. 1, 2010. Mr. Gettelfinger said the payment may now be pushed back to allow the automakers time to become more solvent in the wake of possible federal aid.

Under the jobs bank program, workers receive up to 95 percent of their pay during a layoff. The arrangement has been both a public black eye to the union as national unemployment has soared, as well as an embarrassment to the Big Three managers who agreed to it many years ago.

Mr. Gettelfinger said the bank now assists 3,500 workers, drastically down from just three years ago, but conceded that seems to have little effect on the public.

“Jobs bank has become a sound bite that people use to beat us up,” he said.

The automakers did win qualified praise from both the White House and President-elect Barack Obama on Wednesday for detailed programs they submitted to Congress on Tuesday on how much money they needed, how it would be spent, what cuts they would make and how taxpayers would benefit.

Lawmakers of both parties had slammed the companies last month for what they saw as vague restructuring blueprints that failed to acknowledge the companies’ own marketing and production mistakes.

“It appears, based on reports that we’ve seen, that this time now the executives from these automakers are putting forward a more serious set of plans,” Mr. Obama told reporters at a news conference in Chicago.

But the president-elect said he would monitor hearings before the Senate Banking, Housing and Urban Affairs Committee on Thursday and the House Financial Services Committee on Friday before passing final judgment.

The White House expressed some openness to the automakers’ proposal, but also pointedly did not go so far as House Speaker Nancy Pelosi’s statement Tuesday that bankruptcy for any of the three leading U.S. carmakers is “not an option.”

“We don’t want anybody to be negatively affected by a bankruptcy, but sometimes companies do fail. That’s just the way it is in our system,” said White House press secretary Dana Perino.

Mrs. Pelosi and Senate Majority Leader Harry Reid, Nevada Democrat, say they are prepared to call Congress back to another lame-duck session next week if the automakers can make a persuasive case for aid.

Backed by a major lobbying blitz from major business and labor groups, executives from the Big Three were on Capitol Hill on Wednesday giving closed-door briefings to members and key staffers ahead of the next two days of hearings.

One option being explored is to provide the companies with a smaller “bridge loan” to keep them solvent until Mr. Obama takes office Jan. 20. But how much money would be enough and which fund would be used to finance the bailout are still uncertain.

There is also talk of an expedited bankruptcy filing, with the government providing the funds to keep the automakers’ operations running smoothly while they resolve funding, credit and cost problems.

The automakers maintain that they have been blindsided by a global credit crunch and recession that has caused sales to plummet. Skeptics counter that the industry’s wounds are largely self-inflicted, the product of years of bad design, engineering, marketing and financial decisions.

Andrea Billups reported from Detroit; David R. Sands from Washington. S.A. Miller and Jon Ward contributed to this report from Washington. Christina Bellantoni contributed from Chicago.

Sign up for Daily Newsletters

Manage Newsletters

Copyright © 2020 The Washington Times, LLC. Click here for reprint permission.

Please read our comment policy before commenting.


Click to Read More and View Comments

Click to Hide