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Auto Bailout Update

December 9, 2008 - by Donny Shaw

(Cross-posted from Senatus)

Majority Leader Harry Reid (D-NV) said today that he is optimistic that Congressional Democrats and White House officials will reach an agreement on an automaker bailout/rescue bill (pdf) this morning. There are a couple of issues still to be worked out but Reid sounded confident that they would be completed soon.

As expected, the Senate will go first with debate and votes on the legislation once it is fully written and submitted. Reid wants to see the bill passed either today or tomorrow. He has heard from several members who have other engagements across the country at the end of this week so he would like to adjourn the body until next year as quickly as possible. The only other major item that could keep members through the week is if the President and his team request additional funds from the $700 billion economic rescue program which may need Congressional approval.

The big news, however, came from Minority Leader Mitch McConnell (R-KY) who said the proposal, as it stands now, is “deeply flawed.” He went on to say that it “does not go nearly far enough” in requiring accountability and reforms to the structure of the “Big Three” automakers. He wants to see tougher provisions that force the companies to make changes and that will not leave the door open to future subsidizing by the federal government, which he believes the current bill would do. He also singled out a provision requiring that automakers drop state lawsuits against tough environmental standards as something he and his members oppose.

Although he said Republicans would reserve their judgment until seeing the final text, it sounds like he will oppose the legislation as significant changes from yesterday’s draft version are not likely to be made this morning. McConnell’s support was seen by many pundits as necessary if the bill were to pass. If no changes are made to satisfy his concerns, he will try to rally his members against the bill by way of filibuster.

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Comments

  • Anonymous 12/09/2008 10:02am

    When are you going to pop out of the cake and hold all the other crooked agencies accountable and put the responsible individuals under the light for their roll in the Wall Street fiasco and Billions of bail money. Double standard or Washingtonitis. Lets use em for Bin Laden bait! I’m unemployed now and things do not look good due to the greed and deciet of these thiefs. How could they still be employed, oh thats right you gave-em a bunch of money with no strings attached. When can I get my lump sum. Remember if a horse cannot find water, their are no ducks.

  • Anonymous 12/10/2008 2:02am

    If we are going to use “our” money to bail out the Auto Industry, I have a few suggestions:

    1) – Union takes concessions in the way of 40-50% slash in current and past retirement benefits. No different than all the rest of us that just lost that much in our 401k’s.

    2) – Union takes concession on salary. Align with other semi-skilled and non-skilled labor wages. Come on! Hourly rates for what some do are rediculous. Tie pay to performance.

    3) – Executive Management to halt lavish expenses. Tie all salarys of Senior to Mid-level management to performance of respective areas.

    4) – Review and potentially restructure non-hourly staff. To much overhead maybe??

    5) – Redesign the current to market model. This can be done in at least two different ways:

    The Honda model where you can get an Accord in three trim levels. All other options are “dealer installed”. Minor change, but some savings to the corporation.

    OR

    A new model of little to no stock, but a more ‘just in time’ order system. Fewer dealers and those remaining are for service of existing cars and order centers for new. Create an agile supply chain and manufactoring process where a customer can go into the order center and place order for exactly what they want. Prices are fixed, reflecting the lower overhead. Orders are delivered to order center within x weeks (4 weeks?). No sales people, only product specialist that are on salary. This would remove current slime and distrust from the transaction.

    The Big 3 are at a severe disadvantage to the very flexible and efficient Japanese counterparts who have no Union’s to deal with and no crippling retirement responsibilities hanging over their heads. If no changes are put in place, all of this money being provided will be gone in less than 6months. That should make us made and require changes before we invest our money.

    Just my .02cents….

    th

  • Anonymous 12/15/2008 9:26am

    I wished the slimy salespeople for dealerships would be eliminated from purchasing vehicles!

  • Anonymous 12/16/2008 7:08am

    !If we take concessions in the way of 40-50% then we are still talking about a major economic collapse depression style.

    The reason I say this is because if we take a 50% cut then we cannot afford to spend and probably 50-60 % will end up bankrupt. I know I wouldn’t be able to stay afloat.

    The only hope I have is that the governments wake up and decide it’s too late to save the economy from a major depression and its time to start bailing out the middle class and re educating us all so we no longer rely on factory work for income in North America. PERIOD

  • Comm_reply
    Anonymous 12/20/2008 7:37am

    I have no problem with the reduction of wages to a level equal with other auto manufacturers. The premise of the unions when they started was a good one. However, over the years, they have become extraordinarily greedy. It’s a shame that the person sweeping the floors in a UAW plant is paid significantly more than nurses that save our lives, and teachers that teach our children. Many of those union employees earn more than some doctors. They will deny it, but it’s true. There is a big difference between preventing unfair working conditions and sheer greed! The UAW as it exists is a dinosaur and needs to change with the time. If the country is fortunate, many of the other unions will fall as well.

  • Anonymous 12/22/2008 11:21am

    There are many reasons why the bailout of Wall street and the auto industry is wrong but most importantly because the federal government is far more powerful than it was ever meant to be. Now the government can be a stockholder? Sounds too much like socialism.

    http://www.theartdeptchronicles.blogspot.com

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