Friday, December 12, 2008

$14B auto bailout dies in Senate

Yahoo! News reported A bailout-weary Congress killed a $14 billion package to aid struggling U.S. automakers Thursday night after a partisan dispute over union wage cuts derailed a last-ditch effort to revive the emergency aid before year's end.
Wonderful. Now let us hope the Treasury Secretary does not do an end run around the Senate and give them money from the bailout that is supposed to fix the financial system.
Republicans, breaking sharply with President George W. Bush as his term draws to a close, refused to back federal aid for Detroit's beleaguered Big Three without a guarantee that the United Auto Workers would agree by the end of next year to wage cuts to bring their pay into line with U.S. plants of Japanese carmakers. The UAW refused to do so before its current contract with the automakers expires in 2011.
So why should we continue bailing them out until then?
The breakdown left the fate of the auto industry — and the 3 million jobs it touches — in limbo at a time of growing economic turmoil. General Motors Corp. and Chrysler LLC have said they could be weeks from collapse.
Chapter 11 will protect them, and allow them to emerge in a form where they can be truly competitive.
Ford Motor Co. says it does not need federal help now, but its survival is far from certain.

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