A frantic, last-ditch attempt to forge an emergency-relief package for the Big Three auto makers collapsed in the U.S. Senate, amid a sharp partisan dispute over the wages paid to workers at the troubled manufacturing giants.Best Possible Result
After a marathon day of negotiations, top Democrats, including Senate Banking Chairman Christopher Dodd of Connecticut, appeared close to a deal that would toughen the $14 billion bailout package, in a bid to raise Republican support. The focus of talks was on seeking commitments of a to restructure the industry's debt load and bring labor costs in line with wages paid by Toyota Motor Corp. and Nissan Motor Co. in the U.S., among other things.
But those talks fell apart after Republicans insisted that wages reach parity in 2009. Sen. Bob Corker (R., Tenn.), who emerged a pivotal player this week in negotiations over the industry's future, said negotiators were "three words away" from striking a bipartisan compromise.
Democrats were willing to reach parity, but not on such a swift timetable. Senate Majority Leader Harry Reid (D., Nev.) declared talks at an impasse. "We have not been able to get this over the finish line," he said. "We have worked and worked…that's just the way it is."
Even with a bailout, GM may be forced to file for protection from creditors. GM executives are worrying that suppliers could tighten credit terms, and the government could swiftly recall its loans.
GM's 13-member board is subjecting Mr. Wagoner to deepening scrutiny. The board is now meeting three times per week and receiving constant updates on the financial situation.
"This is an urgent situation and we need to deal with it," said Kent Kresa, a GM director since 2003.
Mr. Kresa said GM management was constantly caught off guard by declines in the U.S. auto market. While executives were continuously revising sales projections, the managers never fully understood how bad the situation could get, he added.
"We simply cannot ask the American taxpayer to subsidize failure," said Sen. McConnell, suggesting the Big Three would have to find a way to survive without congressional help.
Bankruptcy is the best possible result. I am sick and tired of taxpayer money funding corporate ineptitude. Nonetheless I am fearful that Bush and Pelosi will try one more time to revive the dead.
This is the critical juncture. The bill needs to fail. The world will not end. GM will restructure, Wagoner will be forced out, and union contracts that mandate 90% pay to laid off workers will be tossed in the ashcan where they belong.
I salute Senator Mitch McConnell who said "We simply cannot ask the American taxpayer to subsidize failure."
Fax and phone your Senators. Do not bother with the House, they stupidly passed this bill already.
Please phone, email, and fax all the following senators with the message "Do not subsidize failure in any industry. Please block the auto bailout. And do not release the remaining $350 billion TARP funds for Paulson to squander."
Also phone your own senator.
Congressional Phone And Fax Numbers
Click Here For Congressional Phone And Fax Numbers
Richard Shelby
Tel: (202) 224-5744
Fax: (202) 224-3416
Email: senator@shelby.senate.gov
Jim DeMint
Phone: 202-224-6121
Fax: 202-228-5143
Judd Gregg
Phone: (202) 224-3324
Fax: 202-224-4952
Mitch McConnell
Phone: (202) 224-2541
Fax: (202) 224-2499
Sample Fax
Fax Title: Stop Subsidizing Failure - Say No To Auto Bailout
Dear senatorMike "Mish" Shedlock
It is time for Congress to stop subsidizing failure.
Please block the auto bailout.
And do not release the remaining $350 billion TARP funds either. If you do, Paulson will just squander it with no Congressional oversight, just like he did the first $350 billion.
World Will Not End If GM Goes Bankrupt
The very best thing that can happen to GM and Ford is they go bankrupt. The sooner bankruptcy happens the better. Congress will then see that the world will not end. Both companies will reorganize. Both companies will keep making cars.
The airline industry did not stop flying when it went bankrupt and the auto companies will not stop producing cars if they go bankrupt. Coming out of bankruptcy debt levels and interest on debt will be lower. GM and Ford will be more cost competitive.
Not a single job will be saved by propping up GM. In fact, jobs will be lost and money will be wasted if money is thrown at the problem. GM and Ford are suffering under a burden of debt and interest on debt with no conceivable way of paying that debt back.
There is no hope for GM other than bankruptcy and a restructuring of that debt!
GM's burn rate is $2 billion per month. GM loses money on every car and truck it makes.
In one year's time, short term borrowing and interest on long term debt has gone up by $2 billion per quarter, $8 billion per year!
I urge you to BLOCK any bailout for the Auto companies. Any bailout effort would be a further waste of my hard earned money.
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When writing your own rep, put in your address and phone number.
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