November 18th, 2008, Fairfax, VA –In a letter [PDF] sent to top Congressional leadership today, ALG president Bill Wilson strongly urged Congress to reject the controversial taxpayer bailout for the U.S. automotive industry, specifically citing “union excesses” as a primary cause of the automotive collapse.
House Speaker Nancy Pelosi, House Republican Leader John Boehner, Senate Majority Leader Harry Reid, Senate Minority Leader Mitch McConnell, and President-Elect Barack Obama all received the letter regarding the potential bailout which Wilson has condemned as “a betrayal of the American taxpayer.”
“The automotive industry’s problems cannot and should not be passed on to the American taxpayer. And they will only be compounded if the federal government now offers billions of dollars of taxpayer-financed loan guarantees to companies that would otherwise file for bankruptcy,” Wilson wrote in the letter.
In the latest chapter of what Wilson has called “a dangerous slippery slope of bailouts,” Congress may vote this week on whether U.S. automakers GM, Chrysler, and Ford should be given $25 billion of taxpayer loan guarantees. Americans for Limited Government has stood by its message that the proper role of government in the free market is as little involvement as possible.
“These taxpayer loans will, by design, perpetuate these companies in their present form,” Wilson said. “However, it is the very present forms of each company that must be addressed and resolved by market forces, a process that will not occur if government gets in the way of bankruptcy.”
Wilson also condemned Congress’ failure to acknowledge the role of unions in the failures of the U.S. automotive industry. Among other issues, the letter brings to light the fact that compensation for unionized works for American automotive companies total about $73.20 per hour compared to the non-unionized Toyota’s $48 per hour. Also mentioned are the legacy costs which Wilson says can add up to $1,500 per vehicle produced.
“Everybody knows that the extreme terms that the UAW has extracted from the industry for decades on end are its greatest weakness, and that the industry will indeed fail if it cannot now bring the union excesses under control,” wrote Wilson.
Wilson said that Congress needs to reject any proposed bailout—especially those that refuse to address the role of unions in the industry’s failures. Bankruptcy, Wilson said in the letter, is what the industry needs survive and thrive.
“Bankruptcy would allow the automakers to be reorganized, and new labor terms to be worked out,” Wilson added. “The U.S. auto industry will remain uncompetitive, overburdened with legacy costs, and run in its current form if the government attempts to prevent it from failing.”
Wilson, while confident that Congress will yield to the American people’s demands to reject the proposal, is still taking the time to reach out to government leaders. “With the current pro-union legislative leadership, we still need to hold their feet to the fire,” he said.
Detroit Big Three Contraction Impact
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Read the whole thing...lots to digest there and those of us on the anti-Bailout kick ought to be aware of the impact.
UPDATE: This post from Jim Manzi over at NRO's The Corner is worth a read as well.
UPDATE 2: Republican Senate Leader Mitch McConnell talking about Sen. Voinovich’s efforts to help the auto industry this morning on the Senate floor:
“So let me suggest a bipartisan path forward that has not yet been offered by the majority. It’s a compromise being worked on by Senators Voinovich and Bond which repurposes funds already appropriated by this Congress to fund a $25 billion loan program for automakers to build advanced technology vehicles—coupled with new taxpayer protections and federal oversight of how the money is spent. This is a proposal which I believe has support from both sides of the aisle, and that actually has the potential to pass right now—not next year.Just because we CAN do a thing doesn't mean that we SHOULD do it.
“There is a way forward that will help protect the jobs in the auto industry, while also protecting the taxpayers. Senators Voinovich and Bond are working with colleagues across the aisle to protect taxpayers and our long-term economic health. Should this compromise approach be approved by the Congress, it is the only proposal now being considered that has a chance of actually becoming law.”
