US Auto Bailout Bill fails!

[james_chaw]

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12December2008

Auto bailout talks collapse over union wages
By JULIE HIRSCHFELD DAVIS and KEN THOMAS, Associated Press Writers

WASHINGTON – A $14 billion emergency bailout for U.S. automakers collapsed in the Senate Thursday night after the United Auto Workers refused to accede to Republican demands for swift wage cuts.

Senate Majority Leader Harry Reid said he was "terribly disappointed" about the demise of an emerging bipartisan deal to rescue Detroit's Big Three.

He spoke shortly after Republicans left a closed-door meeting where they balked at giving the automakers federal aid unless their powerful union agreed to slash wages next year to bring them into line with those of Japanese carmakers.

Republican Sen. George V. Voinovich of Ohio, a strong bailout supporter, said the UAW was willing to make the cuts — but not until 2011.

Reid was working to set a swift test vote on the measure Thursday night, but it was just a formality. The bill was virtually certain to fail to reach the 60-vote threshold it would need to clear to advance.

Reid called the bill's collapse "a loss for the country," adding "I dread looking at Wall Street tomorrow. It's not going to be a pleasant sight."

The implosion followed an unprecedented marathon set of talks at the Capitol among labor, the auto industry and lawmakers who bargained into the night in efforts to salvage the auto bailout at a time of soaring job losses and widespread economic turmoil.

"In the midst of already deep and troubling economic times, we are about to add to that by walking away," said Sen. Chris Dodd, D-Conn., the Banking Committee chairman who led negotiations on the package.

Sen. Bob Corker of Tennessee, the GOP point man in the talks, said the two sides had been tantalizingly close to a deal, but the UAW's refusal to agree wage concessions by a specific date in 2009 kept them apart.

The autoworkers' contract doesn't expire until 2011.

-Mao na lagi ning resulta. Pag-gahi-ay nag coconut.

[chad_tukes]

these greedy CEOs don't need a bailout. this is their fault in the first place. why rescue them when they did it themselves? look at Honda, Toyota, etc... they're even expanding amidst the financial crisis.

[DrE]

The CEOs arent really the problem. Its the UAW.

[COMCAM]

mao jud, its the UAW. Ang mahitabo ani, sirado ang company. Look at G.E. here in the phil. cge union strike. E close bitaw ah, wagtang ug trabaho.

[Sol_Itaire]

Root cause is the big three's failure to change with the times. too late. tsk tsk

[simoko]

if your labor cost is $73/hr...then there is no way u can be competitive...

Are Autoworkers Really Making $73 an Hour? No, Says UAW & NYT...

[chad_tukes]

The CEOs arent really the problem. Its the UAW.

can you please elaborate?

[chad_tukes]

i don't understand why UAW is to blame. dig into the root cause of the problem and not what directly made the bill fail. a lot of factors have to be considered. if not for failed regulations, this wouldn't have happened. hence, i would agree with solitaire.

[Dorothea]

If these auto companies fold, that will translate to hundreds of thousands of out-of-work employees. Asa man i-absorb ning mga tawhana ron? Mapun-an na pud ang pila mag collect unemployment checks. But mo agree pud ko, it's foolish for the gov't to keep injecting capital to a business nga dili profitable. Ambot unsaon pag resolve ani nga sitwasyon.

[cottonmouth]

They will be merged into one big limping company so there will be no more Detroit Big Three. Instead there will be Big ONE and the name will be something like: General Ford Chrysler.

I tend to blame the UAW coz of their bloated benefits that costed the companies a lot. Workers of the Detroit big three earn more than $7 per hour compared to their counterparts in Japanese brands with plants in the US. Not to mention the company has to pay boatloads of money for the pension and other CBA mandated benefits.

Those overhead costs killed the technology in Detroit. That is probably the reason why up until now the Mustang still uses live rear axle just to save costs. Detroit cars looks good from the outside but it is still the same old tech inside. R&D is just too much for these companies because of the weight of their overhead expenses.

Well, it is better for the Detroit Big Three to die a quick and sudden death and be ressurected again rather than be put in life support but knowing they'll die anyway soon.