The inept management of the Big 3 auto manufacturers (if they really are still the "big three') has also been brazen at minimum. They first came to the US Congress, hat in hand, in their Lear jets, begging for a bailout. And the bailout these unprofitable manufacturers still desire would leave the American taxpayers paying for nothing. In Detroit, a co-dependent relationship has developed over the years between the big three auto companies management and union leaders. Congress has contributed and continues to contribute to the problem by its imposition of laws and requirements on the auto industry which has reduced their competitiveness with other companies. Instead of accepting the previous vote by the market (buyers), Congress, at least the Democrat leadership, seems more than willing to underwrite failed operations with the American Taxpayers being left with nothing -- not even useless stock certificates.
In addition to not interfering and allowing the companies to go through bankruptcy, there are other actions the Government could reasonably consider. As an "example only," the Government could aid the manufacturers and dealerships by waving all bidding and procurement legislation for all government agencies with respect to a one time massive purchase of "Big 3" vehicles to upgrade government vehicle fleets. If the government can buy useless FEMA trailers, it could consider a one-time upgrade of its vehicle fleets. The vehicles might not be as efficient or reliable as those from other auto companies, but at least, the American taxpayers would get something for their money. Detroit's dealership inventory problem would be addressed; money would be spent for "real products" verses empty rhetoric. This and other potential creative ideas could be implemented quickly with positive consequences on the auto industry. If a bridge bailout loan is considered it should be predetermined to be an advance payments for purchases of autos and the "Big 3's" manufacturing assets shielded from all future bankruptcy actions. The taxpayers should get something for their money. But in reality, I doubt that Congress is seeking or listening to new ideas; it is easier to give away our money! *Dr. Bill Smith was the former Director of Acquisitions for the $2 billion European F-16 Co-production program in 35 companies in four European countries with additional administrative oversight of all DOD contracts in those companies and all Air Force contracts in the four countries.
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The lame duck Congress is back in session: Democrats have circulated a problematic first draft of a bill for $15 billion in loans for U.S. auto manufacturers, but no schedule to move forward has been announced and the level of support for the bill remains unclear. Yesterday, Senate Majority Leader Harry Reid brought three House-passed tax bills to the floor, which could serve as vehicles for the auto legislation. Reid said he plans to file cloture on the motion to proceed to a bill tonight, which could set up a cloture vote on Friday.
From Senate & News Sources: As Democrats continue to craft a package of loans for domestic automakers, press reports have indicated that Democrat congressional leaders are ready to move forward on a bill. Doing so is a bit premature, though, since legislative text actually exists at the moment, and no Senate Republicans have even seen the latest proposal. For these reasons, as Senate Republican Leader Mitch McConnell said on the floor this morning, it would be unrealistic to expect votes on this proposal in the Senate today.
Further, there have been numerous reports over the last few days that Democrats in the House and Senate aren’t even sure of how many votes they have for such a package in their own caucuses. The New York Times writes today, “The Democrats may face difficulties generating votes in their own caucus as well. There were 10 Democrats who voted against the $700 billion financial system bailout in October, some of whom could similarly oppose a taxpayer rescue of the auto companies.”
Bloomberg reported yesterday, “Senator Robert Menendez, a New Jersey Democrat, said a package may not have the votes to pass because some lawmakers want more conditions placed on the companies. ‘It’s still up in the air, and the nature of conditions we impose will decide whether this is successful,’ he said.”
Today, The Wall Street Journal reports, “Montana Sen. Jon Tester, for example, is on the fence. Sen. Tester, who voted against the $700 billion bailout for Wall Street, said a car industry bailout should include strong taxpayer protections and a commitment that none of the money is spent overseas, among other things. ‘The big problem with the $700 billion bailout is the lack of accountability in how that money is being spent,’ said Sen. Tester. ‘I don’t really think we want to make that mistake again.’”
Democrat senators may not even all be in town. According to The New York Times, “In addition, Senator John Kerry, Democrat of Massachusetts and Senator Amy Klobuchar, Democrat of Minnesota, are scheduled to leave Washington on Wednesday for a trip overseas.”
Senate Republicans remain concerned about a number of issues with the initial proposal. Speaking on the floor earlier, Sen. McConnell reiterated the position he laid out yesterday:
"For those who need a refresher, let me remind everyone of the Republican criteria for this legislation: first and foremost, we will not let taxpayers spend their hard-earned money on ailing carmakers unless these companies are forced to reform their bad habits — either inside or outside of bankruptcy. This means that workers won’t be paid not to work. This means a final bill would not interfere with pending environmental lawsuits in a one-sided manner. And it means that struggling car companies will have to rationalize their cost structures — because a company that does not respond to market conditions is a company that is doomed to failure anyway. And Republicans will not allow taxpayers to subsidize failure. As I’ve said repeatedly, my Republican colleagues and I want to put struggling carmakers on a path to long-term success. But we cannot support a plan that doesn’t.”
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