Bailout Watch 283: UAW Balks; $14b Bailout Bill D.O.A.
And there you have it: Senate republicans have scuppered the Detroit bailout. Automotive News [AN, sub] reports that democratic Senator Harry Reid has thrown in the towel at the the eleventh hour (literally). “”We have not been able to get this over the finish line,” Senate Majority Leader Harry Reid said after 10 p.m., following daylong negotiations to broker a deal among lawmakers, automakers, auto workers and other interest groups.” AN clearly identifies the United Auto Workers as the gordian knot that could not be unpicked. “But few could have predicted the final stumbling block: A dispute over when UAW workers would consent to have their wages reduced to match those paid to nonunion workers in U.S. import-brand factories. ‘We are three words away’ from an agreement, said Sen. Bob Corker, R-Tenn. He said workers wouldn’t accept a 2009 deadline for the parity demand.” And why would they? They’ll get less of a “haircut,” and more power, in bankruptcy court. Meanwhile, GM released a statement on the bill’s failure…
“We are so screwed.” Just kidding. (Not.) “We are deeply disappointed that agreement could not be reached tonight in the Senate despite the best bipartisan efforts,” GM said in its official uh-oh. “We will assess all of our options to continue our restructuring and to obtain the means to weather the current economic crisis.” Chrysler mega-dittoed. So, what now?
There is hope amongst bailout boosters that The White House will relent and tap into the Troubled Asset Relief Program (TARP) program. Others believe that the Fed can act independently.
Meanwhile, Senator Reid moved to distance himself from the debacle. “Reid said he dreads what will happen on Wall Street on Friday. ‘It’s not going to be a pleasant sight,’ he said. He also said the failure of negotiations will mean a ‘a very, very bad Christmas’ for many Americans.”
[NB: The text of the original blog was amended several times to keep pace with events.]
More by Robert Farago
Comments
Join the conversation
It’s Official! The GOP-Senate opposition to the Detroit bailout is about union-busting. “This is the democrats first opportunity to payoff organized labor after the election. This is a precursor to card check and other items. Republicans should stand firm and take their first shot against organized labor, instead of taking their first blow from it.” From: http://thenewshole.msnbc.msn.com/archive/2008/12/12/1713569.aspx
Geotpf : December 12th, 2008 at 11:31 am Chopper man : December 12th, 2008 at 10:37 am In 2001 my buddies in Commercial felt the axe because of 9-11. There were no bailouts. False. Airline bailout criticized Libertarians: ‘It was a $15 billion mistake’ Posted: September 27, 2001 1:00 am Eastern They only bailed out the airlines butthe airlines still cancelled their orders and the manufacturers brought out the knife and slashed jobs! Perhaps I should have stressed there were no bailouts for the airplane manufacturers. We had massive layoffs which is the norm whenever my industry catches a cold. We'll have them again soon when orders get cancelled. There are already rumblings in the aerospace press about this. My industry follows the market. If Mulally had his way at Ford he would slash jobs to preserve cash reserves, but the rules of engagement in the domestic auto industry prevent that. You can bet Toyota and Honda are sharpening their knives and will cut unnecessary jobs to survive. The Domestic auto manufacturers need to do the same. Ford has somewhat embarked on this type of house cleaning under Mulally's watch. That's why they are in better shape to survive the downturn. But they need to restructure their contracts to remain competitive. And the bailouts to the airlines are a whole seperate subject. Because of these bailouts the airlines are really messed up. Think what airline bailouts have accomplished the next time you fly. We should have let the badly managed airlines fail. Instead we encouraged the poison to fester. Now flying is a pain. Service is a joke and the customers have no recourse, as the bad airlines were allowed to continue, so the disease has infected the whole industry. Bailout the auto industry and nothing there will change either. Things will just get worse.