Surprise: Auto Bailout, Like My Old '79 Malibu, Dies in Senate Driveway


There's nothing like an incoming Democratic administration to stiffen the spines of Republican senators, is there? It's like partisan Viagra or something, I tells ya. The latest on the auto bailout:

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.

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.

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. Ford Motor Co. says it does not need federal help now, but its survival is far from certain.

More here.

Btw, isn't it time they update the number of jobs the auto industry "touches" to every job in America, since at some level everyone is auto-dependent? And by the same calculation, is any industry more vital to American security than the dry-cleaning industry?

I'm glad to to see the auto bailout go down for this round (though I wish the same had happened to the financial services bailout in the version that passed). However, I find it troubling that Republicans are also interested in dictating terms to any business (the story says they would have passed it if they figured the deal would break the unions more than the passage of time already has). That just isn't Congress' job and it's been part of the problem in the U.S. for at least 80 or so years. The federal government has intervened in labor markets for decades in major ways, rigging the negotiations for labor or management (two terms that increasingly fail to reflect current workplace conditions anyway) depending on the moment.

Something to consider: The United Autoworkers did negotiate a very different deal with Ford, GM, and Chrysler last year, a deal that basically brings labor costs for new employees into line with industry averages (averages, I rush to point out, that are being in other parts of America to American workers; one problem with this whole discussion is that it's premised on the notion that there are "domestic" and "foreign" car companies). The Big 2.5's problem is that it needs to jettison the more expensive workers, and quickly, to have a future.

To be honest, I'm as worried at the idea of Congress dictating labor terms for industry as I am about them simply throwing gobs of money at failing companies. None of it is good and the discussion needs to proceed along very different principles, I think. Which is to say that, if government is going to be handing out bailouts (never a good idea), they should be done at the individual level rather than at the corporate or industry level.

Look for the next round of negotiations on an auto bailout to center on how to offload pension and health care costs on to U.S. taxpayers. Oldsmobile and Plymouth may be a thing of the past, but guess who is going to be for the retirements and oxygen machines of the folks who built those behemoths? To paraphrase Mick Jagger, it is you and me.