Thank you, Mr. President.
I rise to speak on the auto bailout proposals before the Senate. But before talking about any legislation, I want to say that I am very concerned about the state of the auto industry. As I said at the first Banking Committee hearing on this issue, I am not concerned out of a sense of American pride or because of the great history of the American auto industry. What concerns me are the workers – the men and women who assemble our cars and trucks, who sell and service vehicles, and those who work for the suppliers that keep the industry running.
Auto manufacturing is the largest manufacturing sector in my state. I know Detroit’s pain is felt in the towns and cities all across Kentucky. In many counties, jobs supplying parts to GM or Toyota are some of the best jobs around. Those jobs are in danger and I am concerned for those workers and their families.
The question facing Congress is what, if anything, we can and should do about the industry’s current problems. As I understand it, one of two bills is going to come before the Senate as soon as this afternoon. One is the bill passed by the House, and the other is a similar Senate proposal. Unfortunately, much like the other bailouts we have passed, those bills rely on hope and promises of future action and do not require serious concessions. And those bills do not address the immediate problem facing the industry, which is a lack of funding for car loans and dealer floor plans.
While the Detroit manufacturers were forced to come to Congress for aid at this time by the economic crisis, their problems are not just a result of problems in the financial markets. The companies are simply uncompetitive in today’s marketplace because of decades of bad business decisions by management and labor. What is needed is a serious restructuring of the companies that brings their costs in line with the costs of cars made in the U.S. by manufacturers like Toyota, and their capacity in line with the true demand for new cars, not the artificially inflated demand of the last few years.
Neither the House bill nor the Senate bill forces the companies and their stakeholders to make the changes necessary to successfully restructure. The so-called "car czar" has no real powers to make the companies and stakeholders reach an agreement that accomplishes the cost and capacity changes that must be made. Because the companies would not survive in the long term without those changes, they would be back before Congress next year asking for more money to get them through the next few months, and back again after that. That is an irresponsible use of tax dollars and would ultimately lead to the death of the companies and many thousands of jobs permanently being lost. Because I care too much about the workers, I can not support either of the bills as they are currently written.
I have previously said that I would support federal assistance for the companies if they undertake a Chapter 11 bankruptcy restructuring. Federal financing and warranty guarantees would enable the companies to emerge from that restructuring successfully and more quickly than they otherwise could. Senators Shelby and Ensign have an amendment to do just that, and I will support their amendment if they are allowed to have a vote.
However, Chapter 11 bankruptcy is not the ideal solution, and I know just the word bankruptcy causes concern for people whose jobs, retirement, and health care depend on the companies. A similar restructuring that accomplishes significant changes outside of bankruptcy would work as well. Senator Corker has an amendment that would require those significant changes as a condition of the federal assistance provided in the Majority’s bill. If the Majority allows a vote on Senator Corker’s amendment, I will support it. If the amendment is adopted to the Senate version of the bill, I will support passage of the bill. If the Majority blocks any Minority amendments, as they have done for nearly the entire Congress, I will oppose the bill and any cloture motions.
I will go ahead and state for the record that if the Corker amendment passes and the bill becomes law, I will oppose any and all attempts to weaken its requirements. I am very concerned that come January 20, the majority will try to rewrite the requirements so that the companies are not forced to make the painful changes that are necessary for them to survive in the long term. I hope that will not be the case.
For these companies to survive and thrive, there must be painful changes, and some jobs will be lost no matter what happens. However, with a successful restructuring, more jobs will be preserved for the long term than if we just prop up the companies with taxpayer dollars and hope for the best.
I yield the floor.
Audio
