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.]
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