Top Republicans Oppose Automaker Bailout

WASHINGTON (AP) -- Top Republican senators said Sunday they will oppose a Democratic plan to bail out Detroit automakers, calling the U.S. industry a "dinosaur" whose "day of reckoning" is coming. Their opposition raises serious doubts about whether the plan will pass in this week's postelection session.

Democratic leaders want to use $25 billion of the $700 billion financial industry bailout to help General Motors Corp., Ford Motor Co. and Chrysler LLC.

Sens. Richard Shelby of Alabama and Jon Kyl of Arizona said it would be a mistake to use any of the Wall Street rescue money to prop up the automakers. They said an auto bailout would only postpone the industry's demise.

"Companies fail every day and others take their place. I think this is a road we should not go down," said Shelby, the senior Republican on the Senate Banking, Housing and Urban Affairs Committee.

"They're not building the right products," he said. "They've got good workers but I don't believe they've got good management. They don't innovate. They're a dinosaur in a sense."

Added Kyl, the Senate's second-ranking Republican: "Just giving them $25 billion doesn't change anything. It just puts off for six months or so the day of reckoning."

House Speaker Nancy Pelosi, D-Calif., said over the weekend that the House would provide aid to the ailing industry, though she did not put a price on her plan.

"The House is ready to do it," said Democratic Rep. Barney Frank of Massachusetts, chairman of the House Financial Services Committee. "There's no downside to trying."

But Democrats have only a narrow majority in the Senate and President George W. Bush opposes the idea. That raises the possibility that any help for automakers will have to wait until 2009, when Barack Obama takes office and the Democrats increase their majority in the Senate.

At least two Republican senators support an automaker bailout - George Voinovich of Ohio and Kit Bond of Missouri. But if the Republicans are seen as neglecting an industry that inevitably collapses, they risk lasting political problems in Midwestern industrial states that can swing for either political party.

Obama won most of the manufacturing states in the presidential race, including Ohio, a perennial battleground, and Indiana, which had not voted for a Democrat for president since 1964. Obama easily won Michigan after Republican John McCain publicly pulled out weeks before Election Day.

Sen. Carl Levin, D-Mich., said automakers are working to adapt to a changing consumer market, but they need immediate help to survive the nation's current economic crisis.

"This is not a Big Three problem alone," Levin said. "This current crisis is a crisis in the economy where there is no credit available to purchase, and where people are not buying cars because they are afraid."

The companies are lobbying lawmakers furiously for an emergency infusion of cash. GM has warned it might not survive through year's end without a government lifeline.

"It's not the General Motors we grew up with. It's a General Motors that is headed down this road to oblivion," said Shelby. "Should we intervene to slow it down, knowing it's going to happen? I say no, not for the American taxpayer."

Obama said he believes that aid is needed but that it should be provided as part of a long-term plan for a "sustainable U.S. auto industry" - not simply as a blank check.

"For the auto industry to completely collapse would be a disaster in this kind of environment," Obama said in an interview on CBS's "60 Minutes" that was set to air Sunday night. "So my hope is that over the course of the next week, between the White House and Congress, the discussions are shaped around providing assistance but making sure that that assistance is conditioned on labor, management, suppliers, lenders, all of the stakeholders coming together with a plan - what does a sustainable U.S. auto industry look like?"

Automakers say bankruptcy protection is not an option because people would be reluctant to make long-term car and truck purchases from companies that might not last the life of their vehicles. But lawmakers opposed to the bailout say Chapter 11 might be a better option than government loans and they cite the experience of airlines that have gone through the process of reorganization.

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  • by Tad Location: Jamesville on Nov 17, 2008 at 12:57 AM
    Finally, Republicans acting like Republicans again! I thought they had all turned into closet democrats. Democrats only want to bail out the auto industry to save the United Auto Workers union. Unless the federal government is prepared to help the auto manufacturer's make payroll for the next thirty to forty years at fifty to sixty billion per, we need to let them fall into bankruptcy. At that point they can get out of the union contracts and draw the average wage of their employees down from absolutely stupid to at least somewhere in the somewhat silly range. Say $40 an hour instead of $80. Unions mean big money for the dems so they are going to commit big to this fight. Trace the big money, from taxpayers to government to Ford, GM, Chrysler to auto workers to UAW union to democrats for their re-election campaigns. Yeah the dems will be hard after this debacle. Kasich 2012!
  • by ??? Location: NC on Nov 16, 2008 at 02:35 PM
    These Republicans are going to be an endangered species in DC after 1-20-09.What a sad day for America.It will just speed up the process of America rolling downhill like a snowball headed for Hades.
  • by Devil Dog Location: New Bern on Nov 16, 2008 at 02:27 PM
    The average hourly wage per capita in the US is $18.21. The UAW wages, to include benefits, is $88.00 per hour. The same worker for Toyota,etc. is about $44.00 per hour to include benefits. Additionally,the UAW demands pay and benefits for nearly 3,000 people to be retained on a "standby to work status". TWA(Transworld Airlines) failed an Southwest Airlines took it over. Southwest is now the #1 airline. ENOUGH is ENOUGH!!!
  • by hope Location: NC on Nov 16, 2008 at 11:46 AM
    This was why I voted Republican this year. We can not continue to bail out bad business at the tax payer expense! Unions in the car industry have killed them. It is sad that this entity was necessary once upon a time to promote fairness in the workplace.

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