 $14b auto bailout plan dies in Senate
(China Daily)
Updated: 2008-12-13 08:05 WASHINGTON: US Congress killed a $14-billion package to help struggling automakers on Thursday, after a partisan dispute over union wage cuts derailed a last-ditch effort to revive the emergency aid before the end of the year. Republicans, breaking with President George W. Bush as his term draws to a close, refused to back federal aid for Detroit's beleaguered "Big Three" automakers. They wanted a guarantee that the United Auto Workers (UAW) would agree by the end of next year to bring their pay into line with US plants of Japanese carmakers, something it refused to do before its current contract with the automakers expires in 2011. The breakdown left the fate of the auto industry - and the 3 million jobs it touches - in limbo at a time of growing economic turmoil. General Motors Corp and Chrysler LLC have said they could be just weeks from collapse. Ford Motor Co said it does not need federal help now, but its survival is far from certain. Democratic leaders called on Bush to immediately tap the $700 billion Wall Street bailout fund for the emergency aid.
Majority Leader Harry Reid, a Democrat, called the bill's collapse "a loss for the country". GM said in a statement it was "deeply disappointed" that the bipartisan agreement faltered. "We will assess all of our options to continue our restructuring and to obtain the means to weather the current economic crisis," it said. Chrysler said it "will continue to pursue a workable solution to help ensure the future viability of the firm". The White House said it was evaluating its options in light of the breakdown. "It's disappointing that Congress failed to act tonight," Deputy Press Secretary Tony Fratto said in a statement. "We think the legislation we negotiated provided an opportunity to use funds already appropriated for automakers and presented the best chance to avoid a disorderly bankruptcy, while ensuring taxpayer funds go only to firms whose stakeholders were prepared to make difficult decisions to become viable." The Senate rejected the bailout 52-35 on a procedural vote - well short of the 60 required - after talks fell apart. Just 10 Republicans joined 40 Democrats and two independents in backing it. Three Democrats sided with 31 Republicans in opposition. Reid also voted "no" for procedural reasons. Congress is not scheduled to return for legislative work until early next month. Some Senate Democrats joined Republicans in turning against the House-passed bill. "In the midst of already deep and troubling economic times, we are about to add to that by walking away," Democratic Senator Chris Dodd, the Banking Committee chairman who led negotiations on the package, said. Democratic House Speaker Nancy Pelosi called Senate Republicans' refusal to support the White House-negotiated bill irresponsible and urged the Bush administration and the Federal Reserve to provide short-term relief for the automakers. "That is the only viable option available at this time," she said. Congressional Republicans have been in open revolt against Bush over the auto bailout. Senate Minority Leader Mitch McConnell of Kentucky joined other Republican lawmakers on Thursday in announcing his opposition to the White House-backed bill, which passed the House of Representatives on Wednesday. He and other Republicans insisted that the carmakers restructure their debt and bring wages and benefits in line with those paid by Toyota, Honda and Nissan in the United States. Hourly wages for UAW workers at GM factories are about equal to those paid by Toyota Motor Corp at its older US factories, the firms said. GM said the average UAW laborer makes $29.78 per hour, while Toyota said it pays about $30 per hour. But the unionized factories have far higher benefit costs. GM said its total hourly labor costs are $69, including wages, pensions and healthcare for workers, plus pension and healthcare costs of more than 432,000 retirees and spouses. Toyota said its total costs are around $48. The Japanese automaker has far fewer retirees and its pension and health care benefits are not as rich as those paid to UAW workers. Agencies (China Daily 12/13/2008 page1) |
