 Left to right: Senators Bob Corker (R-TN), Mitch McConnell (R-KY) and
Richard Shelby (R-Bama.) Are they acting as agents of foreign governments?
The pared down, $14 billion Big Three bailout loan deal, passed the House today, but appears dead in the Senate after talks broke down late tonight, mostly because of the objections of a trio of southern Senators, who had vowed to kill the bill there with a good old fashioned, Old Dixie filibuster, unless the auto workers' union agrees to "bring their members' wages and benefits in line with those of Japanese automakers.' And while you digest the fact of American Senators calling for U.S. workers to bow and scrape for whatever foreign companies have on offer, ask yourself these questions:
Why would three southern Senators want to kill the American automotive industry? Would United States Senators really attempt to crush a crucial part of our homegrown industrial base on behalf of foreign automakers? And if so, shouldn't Richard Shelby of Alabama, Bob Corker of Tennessee and Mitch McConnell of Kentucky have to register with the attorney general as agents of foreign governments? After all, Japan and Germany heavily subsidize their auto industries, and both countries provide universal healthcare, which is one big reason Toyota, Honda, Volkswagon, et.al have much lower legacy costs than the Big Three. And when these companies earn profits, what they don't pay in federal and payroll taxes, goes right back to their home governments, hence our three Senators are in essence, lobbying on behalf of Tokyo and Berlin.
To backtrack, these three gentlemen, and I use the term very loosely, all-but promised to kill a deal to bail out the Big Three in Washington, even though one of them, McConnell, was key to passing the much bigger bank bailout. The problem? Again, not bailouts, per se. They're for them when it comes to the banks (except Corker, who voted against the Wall Street handout.) The trouble here, is that all three of these guys have major foreign automakers implanted in their states, those automakers having been drawn to places like Alabama, Kentucky and Tennessee by billions of dollars in ... you guessed it ... (state) government handouts. Crippling Detroit, even at the cost of millions of American jobs, could only help the Senators' foreign clients out, in no small part by breaking the United Auto Workers union, and preventing it from attempting to unionize southern auto workers, thereby reserving the preferred status conferred on the Toyotas, Hondas and Volkswagons of the world. From the Detroit Free Press:
Alabama is home to plants for Mercedes-Benz, Honda, Hyundai and Toyota. Tennessee is getting a new Volkswagen plant and is home to Nissan’s North American headquarters and other manufacturing facilities.
Georgetown, Ky., in McConnell’s home state, is the site of Toyota’s biggest plant outside Japan.
Sen. George Voinovich, R-Ohio, a supporter of the auto industry rescue plan, said he’s still waiting for specifics on what the legislation’s critics are demanding.
“I think it’s antiunion. I think that’s the motivation behind it,” said Mike Kennedy, 44, of Warren, a member of UAW Local 961 who works at Chrysler’s Detroit Axle plant on Lynch Road. “They want us to file for bankruptcy so they can walk away from their obligations.”
Kennedy said he’s hearing a lot of anger toward Southern senators among rank-and-file members, likening it to a civil war ready to break out again, North against South.
And then there's the small matter of politics: the UAW is a big booster of Democratic Senate candidates, and who needs that, right boys?
What this crisis has created is the unbelievable spectacle of supposedly loyal Americans, starting with Mssrs. Shelby and Corker, demanding that American auto workers accept whatever wages foreign automakers pay their employees, essentially reducing these United States Senators to bag men for the former Axis powers. In fact, freshman Senator Corker's plan read like a World War II appeasement letter:
Corker's four-point plan requires existing bondholders to accept 30 cents on the dollar to help reduce automakers' debt, and force the car companies and United Auto Workers to bring wages immediately in line with foreign automakers. It also would drop supplemental unemployment payments to workers. He also wants the UAW to agree to take half of the payments they are owed from Detroit's automakers to fund a trust the union would manage beginning in 2010 to pay for retiree health care. In exchange, General Motors Corp. and Chrysler LLC would get up to $14 billion in emergency loans immediately to help them fund their operations. If they didn't get concessions by March 15, they would have to file for bankruptcy. So what else is Bobby Corker famous for, besides making oodles of money in real estate and beating Harold Ford Jr. in 2006 with the help of that "call me" ad? Luring foreign automakers to his home state, of course, and hating on Detroit:
He grew up in Chattanooga, a city that was repeatedly rejected by U.S. auto makers as a site for new plants. But Volkswagen turned around Chattanooga’s fortunes in July by agreeing to build a $1 billion assembly plant near the city–the German auto maker’s first assembly plant in the U.S. Volkswagen plans to build hundreds of thousands of vehicles there in the next few years, providing 2,000 manufacturing jobs as well as countless more jobs in supply and logistics. So, where the Big Three had let the city down, Volkswagen capped the city’s long-desired industrial revival. As Corker told the Associated Press at the time, the city “will never be the same again.” Volkswagen is building the plant to compete with Toyota Motor, which puts Chattanooga inside the most competitive dynamics in the global auto industry.
McConnell, the Senate minority leader, has made no secret of his eagerness to see the American auto industry say "sayonara" so that the Japanese can keep greasing up non-union Kentucky:
GOP Senate Leader Mitch McConnell’s not so concerned about the death of the US auto industry because Japanese companies make cars in his state: “We also have other auto manufacturers who are doing quite well,” McConnell said, naming Toyota’s Georgetown, Ky., operation. “It happens not to be American companies and that is sad. But it’s not like we don’t have success in the auto industry. We do.”
And Shelby, the ranking Republican on the Senate banking committee, has been equally skeptical of the absolute need to have a strictly "American" automobile industry:
WASHINGTON (Nov. 19) - Sen. Richard Shelby, who represents a state with 134,000 people who help build cars for Asian and European companies, was unpersuaded Tuesday when American auto executives asked Congress for emergency financial aid to stay afloat. "Are we here in the Senate being asked to facilitate a stronger, more competitive auto manufacturing sector, or to perpetuate a market failure?" Shelby asked at the opening of a standing-room-only hearing on Capitol Hill. After the hearing, he concluded that it was the latter.
And about those state subsidies, you know, the government money being thrown at an auto industry, only the governments are former Confederate states and the automakers are NOT American? Well ... it's a LOT of money:
Shelby's position is not merely that of a fiscal conservative. His home state has provided millions of dollars in taxpayer subsidies to lure Honda, Hyundai, and Mercedes-Benz to build huge plants there. Indeed, some critics believe that without the incentives from Alabama - and similar tax breaks given by a number of other states to a dozen foreign automakers - the Detroit companies would not need a federal bailout. The foreign-based automakers have received relatively little attention during the debate over the auto bailout bill because they have not asked for money from Con gress. Yet their role is immense: In 2007, for the first time, foreign firms produced a majority of cars sold in the United States. While Detroit's auto industry is shutting plants and slashing union jobs, the foreign-based auto companies have been booming, particularly in the South, with new nonunion plants slated to open in Tennessee and Georgia. House Financial Services Committee chairman Barney Frank of Massachusetts, who is playing a key role in hammering out a loan deal, said in an interview that some opponents are "completely hypocritical" because they back local tax incentives to lure foreign companies that now pose some of Detroit's stiffest competition. Frank also denounced those members of Congress who oppose the assistance for the Detroit automakers as a matter of fiscal prudence at the same time they fight for agricultural subsidies for their states.
So how much money are we talking? It is difficult to ascertain the exact amount of tax subsidies provided to the foreign automakers because they are provided by so many localities and in different ways, including property tax breaks and corporate tax abatements. One study found that the total subsidies to foreign automakers exceeded $2 billion. Alabama paid more up front per job in tax subsidies to the foreign automakers than Detroit is asking per job with the loans, said Cole of the automotive center.
I've heard figures of upwards of $250,000 per job gained. Meanwhile, the GOP is about to preside over the flushing of 3 million jobs and the pensions of 850,000 retirees ... many in swing states. For Shelby, Corker and McConnell, who live in ruby red states, that may not matter. But it will matter to their party, which will be blamed ... make no mistake about it ... if the Big Three, or even just General Motors, vanish under Bush's watch. Believe it.
I say all of this, by the way, as one who is no fan of the "built in obsolescence" crowd that's been running the U.S. auto industry for a generation (and the moron politicians who heaped SUV tax break largesse on them), and as somebody who specifically detests the Ford Motor Company (my three-year-old Expedition having literally exploded in my driveway a couple of years ago, and the company having sniveled out of responsibility for it, and sent me a nice letter about the ignition switch recall the NEXT DAY.) My mother had a Chevy Cavalier when I was growing up that was a piece of shit, too. In fact, all our cars when I was growing up were made by General Motors, and the only one that was worth a plug nickel was my gigantic 1974 Buick Apollo that my mom's best friend gave me for $300 my senior year in high school (in 1986. Hey, you can fit a lot of friends in a Buick Apollo...) I have, on occasion, vowed out loud to never buy another mother-bleeping American car. And yet, at my house, we have one foreign and one domestic -- an Acura and a Jeep Grand Cherokee Limited. I drive the Jeep. And I must admit, I love the bloody thing. But what's most important is that for all their faults, and I think all of the management should be fired, I believe that whatever Shelby, Corker and McConnell might think, America simply cannot remain an industrial power without a homegrown manufacturing industry, and right now, the auto industry is the biggest manufacuring sector left. If we let it go, even 10 million Honda jobs in Dixie at Wal-Mart wages won't buy us back our economic clout.
I end with a few prophetic words from Patrick J. Buchanan:
In the 1950s, we made all our own toys, clothes, shoes, bikes, furniture, motorcycles, cars, cameras, telephones, TVs, etc. You name it. We made it. Are we better off now that these things are made by foreigners? Are we better off now that we have ceased to be self-sufficient? Are we better off now that the real wages of our workers and median income of our families no longer grow as they once did? Are we better off now that manufacturing, for the first time in U.S. history, employs fewer workers than government? We no longer build commercial ships. We have but one airplane company, and it outsources. China produces our computers. And if GM goes Chapter 11, America will soon be out of the auto business. Our politicians and pundits may not understand what is going on. Historians will have no problem explaining the decline and fall of the Americans.
Labels: bailouts, Big Three, Detroit, Republicans, Senators, the Bush bailout, the economy, The South, U.S. automakers, unions |
