Bush asked to step in to save US auto giants

December 13th, 2008 - 11:06 am ICT by ANI  

Barack Obama

Washington, Dec.13 (ANI): With the US Senate stalemated over offering a credible bailout package for the American auto industry, angry Republicans have urged President Bush to respect the legislative process and consider reversing course and rescuing them on his own.

According to the Washington Times, the failure of the bailout has sparked of a full-blown intra-party war, with several Republicans saying the White House scuttled their efforts to win concessions from the United Auto Workers union.

One Republican senator argued that Washington “might be completely out of control.”
Late Thursday Senate Republicans led a filibuster to block a 14 billion dollar rescue package for the automakers that Bush had negotiated with congressional Democrats.

The bill failed to reach the 60 votes needed to stop the filibuster, with senators voting 52-35 for the bill.

Hours later the White House said Bush would consider tapping funds from Troubled Assets Relief Program, created by Congress earlier this year to help financial institutions, to aid automakers.

Previously the president had balked at using TARP funds, saying they were not appropriate for rescuing failing auto businesses.

“Under normal economic conditions we would prefer that markets determine the ultimate fate of private firms. However, given the current weakened state of the U.S. economy, we will consider other options if necessary including use of the TARP program to prevent a collapse of troubled automakers,” the paper quoted White House Press Secretary Dana Perino, as saying.

“It is disappointing that while appropriate and effective legislation to assist and restructure troubled automakers received majority support in both houses, Congress nevertheless failed to pass final legislation,” she said.

But senators said the White House hurt their efforts to win concessions from the unions and get a deal done.

Senator Bob Corker, Tennessee Republican and his party’’s chief negotiator on the rescue package, was quoted as saying that United Auto Workers President Ron Gettelfinger now has no incentive to work out a deal.

Senator Judd Gregg, New Hampshire Republican, said Bush would be wrong to reverse course and use the TARP funds.

“A decision to use TARP would set a new precedent that the next administration may use to aggressively assert industrial policy and expand government control into numerous specific businesses that are having troubles during these difficult times,” he said.

Republicans wanted to have a date certain in 2009 by which the auto unions would have to have a lower pay scale comparable to manufacturers such as Nissan and Volkswagen.

But Gettelfinger said the differences between various wage scales was unclear and to determine a level of parity would require research, which he said the union would want to extend to the management teams and supplier contracts for foreign-transplant car companies in the U.S.

Gettelfiner said Repubicans wanted the auto industry restructured “on the backs of workers and retirees,” adding that none of the other stakeholders — Big Three management and creditors — were asked to set a date certain for concessions.

Bush did win praise from Democratic leaders who said he had negotiated fairly with them.

They also urged him to use the TARP funds a move they had advocated from the beginning, though they said he should insist auto manufacturers meet the requirements set forth in the bill Congress tried to pass.

Both General Motors Corp. and Chrysler LLC have suggested they could be just a few weeks away from bankruptcy without the prompt passage of a bill.

Ford Motor Co. is in somewhat better short-term shape, but the collapse of even one of Detroit’’s Big Three would have huge repercussions throughout the economy.

Together, they employ about 3 million people in autoworker and industry-related jobs.
President-elect Barack Obama said Bush and Congress should keep working.

“I share the frustration of so many about the decades of mismanagement in this industry that has helped deliver the current crisis. Those bad practices cannot be rewarded or continued. But I also know that millions of American jobs rely directly or indirectly on a viable auto industry, and that the beginnings of reform are at hand,” he said in a statement. (ANI)

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