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Opposition To Automaker Bailout Grows

Discussion in 'Political Zone' started by Maikeru-sama, Nov 16, 2008.

  1. Maikeru-sama

    Maikeru-sama Mick Green 58

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    November 16, 2008 · An emergency cash bailout for troubled U.S. automakers is coming under increasing challenge as Congress gets ready for its lame-duck session this week. Detroit auto executives say their companies may not have enough operating funds to make it far into the new year without government help.

    Congress has already designated $25 billion to help the automakers retool for more efficient models. Now the Bush administration wants that money to be used for this cash flow emergency.

    Massachusetts Democratic Rep. Barney Frank told CBS' Face the Nation that's a bad idea because it would prevent the carmakers from retooling. He said there should be a separate package.

    On the same show, Republican Sen. Richard Shelby of Alabama said he'll fight any emergency cash for companies proven incompetent.

    Shelby likened the Detroit automakers to a "dinosaur" and said taxpayers shouldn't prop them up.

    Showdown looming in Congress of automaker rescue

    from The Associated Press

    Hardline opponents of an auto industry bailout branded the industry a "dinosaur" whose "day of reckoning" is near, while Democrats pledged Sunday to do their best to get Detroit a slice of the $700 billion Wall Street rescue in this week's lame-duck session of Congress.

    The companies are seeking $25 billion from the financial industry bailout for emergency loans, though supporters of the aid for General Motors Corp., Ford Motor Co. and Chrysler LLC have offered to reduce the size of the rescue to win backing in Congress.

    Senate Democrats intended to introduce legislation Monday attaching an auto bailout to a House-passed bill extending unemployment benefits; a vote was expected as early as Wednesday.

    A White House alternative would let the car companies take $25 billion in loans previously approved to develop fuel-efficient vehicles and use the money for more immediate needs. Congressional Democrats oppose the White House plan as shortsighted.

    Majority Democrats will need at least a dozen GOP votes in the Senate to prevent opponents from blocking their measure. So far two Republicans publicly have voiced support for the idea. Several others, included Minnesota Sen. Norm Coleman on Sunday, have indicated they might accept a rescue under strict conditions.

    Sens. Richard Shelby of Alabama and Jon Kyl of Arizona said it would be a mistake to use any of the Wall Street rescue money to prop up the automakers because a bailout would only postpone the industry's demise.

    "Companies fail everyday and others take their place. I think this is a road we should not go down," said Shelby, the senior Republican on the Senate Banking, Housing and Urban Affairs Committee. "They're not building the right products," he said. "They've got good workers but I don't believe they've got good management. They don't innovate. They're a dinosaur in a sense."

    Added Kyl, the Senate's second-ranking Republican: "Just giving them $25 billion doesn't change anything. It just puts off for six months or so the day of reckoning."

    House Speaker Nancy Pelosi, D-Calif., said over the weekend the House would aid the ailing industry, though she did not put a price on her plan. "The House is ready to do it," said Democratic Rep. Barney Frank of Massachusetts, chairman of the House Financial Services Committee. "There's no downside to trying."

    Frank's committee has scheduled a Wednesday hearing on an auto bailout.

    It is a more difficult fight in the Senate, given the Democrats' slim edge and President George W. Bush's opposition. Bush wants to speed the release of $25 billion from a separate loan program intended to help the automakers develop fuel-efficient vehicles and have that money go toward more urgent purposes as the companies struggle to stay afloat. The loan program was approved by Congress last year, but more legislation would be necessary to change its purpose.

    "That should be done this week," Commerce Secretary Carlos Gutierrez said. He said reopening the Wall Street bailout and including automakers could attract other industries looking for bailouts.

    "If you start that, where do you stop?" he asked. "There's a line of companies of industries waiting at Treasury just to see if they can get their hands on those $700 billion."

    The disagreement raises the possibility that any help for automakers will have to wait until 2009, when President-elect Barack Obama takes office and the Democrats increase their majority in the Senate.

    At least two Republican senators support an automaker bailout — George Voinovich of Ohio and Kit Bond of Missouri. But if the Republicans are seen as neglecting an industry that inevitably collapses, they risk lasting political problems in Midwestern industrial states that can swing for either political party.

    Obama won most of the manufacturing states in the presidential race, including Ohio, a perennial battleground, and Indiana, which had not voted for a Democrat for president since 1964. Obama easily won Michigan after Republican John McCain publicly pulled out weeks before Election Day.

    Former GOP House Speaker Newt Gingrich said young voters, who overwhelmingly supported Obama over Republican John McCain in the presidential election, could get turned off by expensive corporate bailouts that they will eventually have to pay for.

    If "those 20-year-olds and 30-year-olds start to figure out they're going to pay the taxes, they're not getting the billions, I think you might find a lot of dissatisfaction by next summer," Gingrich said.

    Sen. Carl Levin, D-Mich., said automakers are working to adapt to a changing consumer market, but they need immediate help to survive the current economic crisis. "This is a national problem," Levin said. "The auto industry touches millions and millions of lives."

    The companies are lobbying lawmakers furiously for an emergency infusion of cash. GM has warned it might not survive through year's end without a government lifeline.

    "It's not the General Motors we grew up with. It's a General Motors that is headed down this road to oblivion," said Shelby. "Should we intervene to slow it down, knowing it's going to happen? I say no, not for the American taxpayer."

    United Auto Workers President Ron Gettelfinger would not flat-out reject further concessions by members on top of the two-tiered wage system and other concessions the union gave the automakers last year, but he bristled at calls for further sacrifices by his members.

    "Let's go to AIG, Bear Stearns, active and retired workers: Did anybody go in and ask them to give back wages and benefit levels?" Gettelfinger said on WDIV-TV in Detroit. "What about the bond traders? Did anybody ask them? What about the cleaners in the building? Why would the UAW be any different?"

    "We made an agreement, and we made major concessions," he said. "So how can you blame the autoworkers?"

    Obama said he believes aid is needed but that it should be provided as part of a long-term plan for a "sustainable U.S. auto industry" — not simply as a blank check.

    "For the auto industry to completely collapse would be a disaster in this kind of environment," Obama said in a "60 Minutes" interview airing Sunday night on CBS. "So my hope is that over the course of the next week, between the White House and Congress, the discussions are shaped around providing assistance but making sure that that assistance is conditioned on labor, management, suppliers, lenders, all of the stakeholders coming together with a plan — what does a sustainable U.S. auto industry look like?"

    Automakers say bankruptcy protection is not an option because people would be reluctant to make long-term car and truck purchases from companies that might not last the life of their vehicles. But lawmakers opposed to the bailout say Chapter 11 might be a better option than government loans and they cite the experience of airlines that have gone through the process of reorganization.

    Shelby and Levin were interviewed on NBC's "Meet the Press" and Shelby also appeared with Frank on CBS' "Face the Nation." Kyl spoke on "Fox News Sunday" and Gutierrez was on "Late Edition" on CNN.

    link
  2. Maikeru-sama

    Maikeru-sama Mick Green 58

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    Some pretty strong language by Senator Shelby and language I happen to agree.

    However, I wonder what would happen if over 3.5 Million people lost their jobs?

    For anybody in the know, are the following true:
    1) US Automakers are forced to comply with higher Environmental Standards than their Asian competitors.

    2) Japan and China have really unfair trade practices and purposely do so in order to limit American Automakers in their markets.

    I heard someone on the radio make this claim. To me, if the above are true, it is just as big as the Union problem and incompotent management.
  3. ninja

    ninja Numbnuts

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    How about those who voted for Obama? How do they feel about a bailout for the Big Three? Obama is for a bailout. Everyone knew Obama would be for a Big Three bailout even before the election.

    Anyone who voted for Obama and is now against a bailout for the Big Three is an absolute idiot or other issues were a bigger concern.
  4. Maikeru-sama

    Maikeru-sama Mick Green 58

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    And yet John McCain not only voted for the $700 Billion Bailout package, he then proposed an additional $250 Billion to help homeowners who are facing forecloser.

    Remeber, when you point the finger, there are 3 pointing right back at you!

    Ron Paul, the guy I wrote in voted against the Bailout and is vehemently opposed to bailing out the Big 3.

    I wonder if McCain would've had the courage to fight against the Bailout of the Big 3? He certainly didn't have the courage to say no to the Bailout.

    This man speaks the truth:
    http://www.youtube.com/watch?v=1uykJyzdb8w

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