No Runny Eggs

Because I bashed Rep. Paul Ryan (R-WI, my Congresscritter) for his vote on the UAW bailout, it is only fair that I present his side of the argument. From a press release that came into my mailbox a half-hour ago (only stripping off the announcement that it was a statement):

It is clear that the mounting hardships throughout Southern Wisconsin have been downright gut-wrenching. In addition to the imminent closure of the GM plant in my hometown of Janesville and mass layoffs elsewhere, hard-working Wisconsinites are finding it increasingly difficult during this recession to cope with strained credit markets, rising health care costs, and making their monthly mortgage payments.

The American automotive industry is under considerable distress, and various proposals have been put forth to provide aid to those in need. I’ve maintained that any assistance to the domestic auto industry should be drawn from previously approved funds from a U.S. Department of Energy loan package, rather than divert resources from the financial rescue package or rely on additional taxpayer dollars. H.R. 7321 cuts through the bureaucratic red tape and expedites these previously appropriated funds. Because no additional taxpayer dollars were appropriated, I was able to support this legislation.

At the forefront of my mind are jobs in Southern Wisconsin and the retiree commitments to workers that could be placed in jeopardy under certain bankruptcy scenarios. To be clear, this bill is not intended to save the American auto industry and makes no guarantees that layoffs in this industry will end. Congress must stop overselling what it can do. At the very least, I am hopeful that by extending these loans to the American auto manufacturers, bankruptcy will be avoided in the near term and protections for retirees will remain intact.

As Jules Winnfield once said, well, allow me to retort. The UAW workers, who are dwindling in number in Wisconsin with or without the bailout by the way, aren’t the only ones who are hurting. Sending $14 billion of everybody’s money down the rat hole known as GM, Ford and Chrysler just so they can survive the next 3 1/2 months without any permanent reforms, without any assurance that they would ever return to profitability, is the height of stupidity. The market forces are saying that the Big Three are sending too much money out the door in compensation, and the bailout only seriously addresses the white-collar portion (not even half) of that.

I suppose I could give a half-cheer that the bailout is using $25 billion that was already committed to the Big Three, and a quarter-cheer that it leaves $9 billion for the original purpose of plant modernization.

Chapter 11 bankruptcy is not the end of the world. Indeed, many of Ryan’s Republican colleagues suggested that a pre-negotiated Chapter 11 bankruptcy, which would allow the union portion of that compensation to be adjusted with less UAW interference, is the way to go. I agree.