Tuesday, December 9, 2008

Senator Corker on the Bailout Plan

Corker Disappointed in Initial Outline of Auto Bailout Plan Being Developed by White House and House Democrats

December 6, 2008 CHATTANOOGA, TN – U.S. Senator Bob Corker (R-TN), a member of the Senate Banking, Housing, and Urban Affairs Committee, today issued a statement following reports of an auto bailout plan being developed between House Democrats and the White House.

“Based on the outline we’ve seen so far, we are disappointed in the plan that is being developed between House Democrats and the White House,” said Corker.

Earlier this week at the Senate Banking hearing Sen. Corker outlined a plan which states: “Before we even contemplate making a loan to these companies, we need to put in place specific and rigorous measures that include:

  • “One, give existing bondholders 30 cents on the dollar to help reduce their overall debt load.
  • “Two, bring wages immediately in-line with companies like Nissan and Volkswagen.
  • “Three, GM owes $23 billion to the United Auto Worker’s VEBA (voluntary employees’ beneficiary association) account. The union must agree to take half of that payment in GM stock.
  • “Four, the union must agree to do away with payments to workers who are still receiving almost full compensation up to four years after their jobs have ended.

“These are the same types of conditions a bankruptcy judge might require to ensure that these companies become viable and sustainable into the future, and if they will agree to these terms then we have something to talk about. The process I have suggested would allow them to avoid the problems and stigma that accompany a formal bankruptcy, while forcing them to do the things they need to do to be successful companies.”

Comment: Yes! This makes sense to me. The comment about Nissan and Volkswagen are especially relevant to me as a Tennessean. Not all cars are made in Detroit. Both Nissan and Volkswagen have plants in Tennessee and are large employers. Not only do these two companies employ a lot of people but many more people are employed by smaller companies that supply or support, in some way, these two companies. Why should taxpayers subsidize union wages that will produce cars that will be in competition with cars produced in Tennessee where the wages are not subsidized?

If the taxpayers are going to bail out the Detroit auto industry, we should not put conditions on them that equate to micromanagement. Congress shouldn't design the cars or tell Detroit what to produce. We should impose conditions that force them to become competitive.

I am proud of Senator Bob Corker and respect and admire him. I agree with his common sense conservative values and admire his intellegence and hardwork.

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