TN GOP opposes Spring Hill GM bailout
Tennessee Republican Party Spokesman Bill Hobbs speaks out in opposition to a proposed bailout for the employer of 3,500 workers at Spring Hill's GM plant.
GM, Ford and Chrysler aren't doing so well, though, and there are a number of reasons for that. Bad management decisions to keep producing SUVs rather than shift to smaller, more fuel-efficient vehicles. Bad labor contracts that lock GM, Ford and Chrysler into high costs for wages and health and pension benefits that make them uncompetitive with the foreign makers. And a reputation, earned over the recent decades, for lousy products and poor quality.
Marsha Blackburn (R-TN), in whose district some of the GM employees live, doesn't like the idea of bailing them out, either.
"What the auto industry is now doing is asking the American taxpayer to cover their legacy cost-their pension, their retirement, their health care benefits, those items. And they are now asking the American taxpayer to write a check and pay for those, and I’ve got a problem with that."
Rep. Blackburn may soon be joined by Rep. Lincoln Davis (D-TN) who represents the district in which the Spring Hill GM plant resides.
In a phone call to his Washington offices, Davis Spokesperson Jon Boughtin said Rep. Davis has not issued a statement or opinion on the proposed auto industry bailout, noting the bill just came out of the Financial Services Committee moments ago. Rep. Davis was the only Democrat in Tennessee's congressional delegation who voted against the original $700 billion banking industry bailout.
Here's an October article in the Tennessean discussing the impact of GM's presence in Spring Hill, TN.
According to GM, 48 percent of the plant's 3,481 employees live in Maury County, mainly in Columbia. An additional 23 percent live in Williamson County.
About 2,400 plant employees were furloughed when production of the Saturn Ion and VUE models ended in March 2007.
They were called back to work this summer after GM retooled to build the Traverse at the plant.
A host of related businesses have flocked around the plant. One such business is the GM Technical Training Center on Beechcroft Road, where Brandon McCulloch, who served on the city Board of Mayor and Aldermen for nine years, teaches dealership technicians.
"Whether it's Saturn or GM, it's still a big economic impact on the community," McCulloch said, noting that many people still call it the Saturn plant.
One remnant of the Saturn days, Saturn Parkway, will continue to leave its mark on the city. No one at GM is going to ask that the street be renamed, said GM spokeswoman Kate Neary.
"This will always be the birthplace of Saturn," she said. "It's part of the city's history. We don't want to change that."
UPDATE 11-19-08 10:18am: Tennessee Republican Party Spokesperson Bill Hobbs demands an apology and retraction
If only there were a mechanism
If only there were a mechanism by which an insolvent company could obtain protection from its creditors, continue its operations, restructure its debt and equity, and have an impartial person modify its contracts to change burdensome labor contract provisions and rationalize its dealer network. Wait, there is such a mechanism: Chapter XI of the Bankruptcy Law. That's what the auto makers should be doing. Instead, they and the UAW would prefer to have the hapless taxpayers of the United States fund their over-generous union contracts. That's the payback for labor's deep-pocketed support of the Democrats. Change we can believe in.
Auto Industry Bailouts
I'm personally opposed to blank-check bailing out the automakers. There's a big case of "made bed, go lie in it" there for them.
BUT. and this is a mammoth BUT. The Auto manufacturers are the single largest remaining manufacturing industry left in the U.S. They and their suppliers make up at least 35% of the Gross Domestic Product (GDP).
Just having a bought of indignant righteousness and telling the automakers to go die, will have an EVEN larger impact on our economy than the current credit crunch. Because the automakers will wind up laying off their workforces. Their suppliers will wind up laying off their workforces (Aluminum, Steel, electronics, you name it), and we could literally crash the economy the rest of the way.
Think Great Depression era, only worse.
What I would propose is a multi-stage bail-out-ette. Design a "soft-landing plan that allows each automaker to transition out.. Think of it as better than bankruptcy, but that level of oversight, into their businesses.
If the automakers can come up with a transition plan, that moves them more or less rapidly from big-bad SUVs (SUVs are an unintended consequence of CAFE standards, by the way) to smaller hybrids, and other more fuel economical designs. This keeps the suppliers supplying, albeit potentially different materials.. and can hopefully help automakers to shed excess cost centers... Think of it as a Marshal Plan for America .. we rebuilt Germany's manufacturing capability after WWII.. we did the same for Japan... Why not for OUR OWN country, as well?