According to numerous reports, the lead Republican negotiator for the Senate Bob Corker, believed the Auto bail out bill was “within three words” of getting passed last week.
Three words. Only three words. It really doesn’t seem like much. After all, the parties had already agreed that:
- Management would take a hit – dramatically reduced salaries and bonuses, no golden parachutes, no planes. plus they would have to answer to an Auto Czar, ensure they meet CAFE standards and dump money into non fossil fuel vehicles
- Bondholders would take a hit – Bondholders had agreed to take $.30 on the dollar to reduce the debt that is held on the automakers
- Equity holders would take a hit – The government would get warrants for 20% of the equity in the participating company’s thus dilluting equity that is just above penny stock value.
- Even slackers had contributed – the UAW had to agree to do away with payments to workers who were still receiving full compensation for up to four years even after their jobs ended.
The remaining piece was to get the UAW members to make a contribution by agreeing to adjust their compensation. Larry Kudlow describes Corker’s efforts best:
During the negotiations Corker tried to be as compromising as possible on the tough question of wages, benefits, and overall compensation. He asked the union to be competitive, but he never specified parity or complete equality with the foreign transplants. And Corker provided that the comp-package would be certified next year by the secretary of Labor "” an Obama selection. In addition, the Senate governing the package would be made up of 58 Democrats, rather than today’s 50.
All Corker asked was a 2009 date for union pay restructuring. Sen. Corker never specified his date. He asked the UAW to name its date for a new pay package. But it had to be in 2009. In return, union members would get a lot of stock in this deal "” up to $10.5 billion of new equity as GM’s heavy debt burden would be converted into common shares.
To this request, one that should be a throw away if, as UAW President, Ron Give-u-the-finger claims, the Big 3 are only $.44/hour different than the foreign competitors, the UAW President gave Corker the finger.
Instead, immediately following the vote, Give-u-the-finger started his media campaign of blaming Republicans, and their hatred of unions, as the reason that the bill was tubed. This weekend, the new meme was carried by many of the MSM. One of the dysfunctional arguments was made by McClatchy.
The article starts by stating the “Republicans hate unions” meme. They then toss in a paragraph that was intended to be a throw away:
It also helped that their constituents made clear how much they disliked the idea of another bailout.
They then go on to lay out how the Republicans were skeptical of the $700 billion TARP bill. They also recognize the Republican platform is for smaller government and less government intervention….Damn, principles!
After puking some more about how Republicans were just out to get unions, another throw away paragraph is inserted:
They also liked how he and his colleagues were following the first rule of politics: Know your constituency.
McClatchy recognizes that a majority of Americans are against any bail out of the Big 3. They also recognize that constituents, after feeling fooled by the TARP plan, are now angry as more pigs show up at the government trough. Yet somehow, McClatchy believes that the Republican Senators should have thumbed their noses at the folks who put them in office and vote to slap the taxpayers once again.
While Republican Senators finally stood on some principle in negotiating the bail out, it doesn’t appear that the “Republican” President feels the same compunction. Rumor has it that President Bush is urging Hank Paulson to use some of his TARP money to “bridge” the auto makers until Obama is in office.
It’s unclear what the next steps are for the Big 3. However, I’m sure the Congress has not heard the last from Ron Give-u-the-finger and his cohorts. In fact, with the “never say no” attitude of Nancy, Harry, Hank and President Bush, it may be appropriate to open each day of Congress with the first 10 seconds of this:
