Dec 13, 2008 3:18 AM
The Union
The American Civil War (1861–1865), also known as the War Between the States and several other names, was a civil war in the United States of America. Eleven Southern slave states declared their secession from the U.S. and formed the Confederate States of America (the Confederacy). Led by Jefferson Davis, they fought against the U.S. federal government (the “Union”), which was supported by all the free states and the five border slave states.

No, not that Union, this union:

The International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, better known as the United Auto Workers (UAW), is a labor union which represents workers in the United States, Canada, and Puerto Rico. Founded in order to represent workers in the automobile manufacturing industry, UAW members in the 21st century work in industries as diverse as health care, casino gaming and higher education.

Why are these guys against the auto industry loan guarantees? The Union, the United Auto Workers (UAW).

Alabama Senator Richard Shelby, who has been particularly vocal in his opposition of financial assistance for the Big Three, said on “Meet the Press,” stated that:

We don’t need government — governmental subsidies for manufacturing in this country. It’s the French model, it’s the wrong road. We will pay for it. The average American taxpayer is going to pay dearly for this, if I’m not wrong.

Senator Richard Shelby is the senator from Alabama. The same Alabama that offered lucrative incentives (subsidies) to Mercedes Benz in the early 1990s to lure the German automobile manufacturer to the State.

Alabama offered a stunning $253 million incentive package to Mercedes. Additionally, the state also offered to train the workers, clear and improve the site, upgrade utilities, and buy 2,500 Mercedes Benz vehicles. All told, it is estimated that the incentive package totaled anywhere from $153,000 to $220,000 per created job. On top of all this, the state gave the foreign automaker a large parcel of land worth between $250 and $300 million, which was coincidentally how much the company expected to invest in building the plant.

Where was your outrage then Senator?

Tennessee Senator Bob Corker has crafted a separate, three-pronged plan:

It would require the two firms closest to bankruptcy, General Motors and Chrysler, to reduce their debt by two-thirds. Bondholders would have “plenty of incentive to make sure that the debt is reduced by two-thirds” or risk losing even more if the firms go into Chapter 11, where their bonds might be further discounted, Corker said. “We’re going to force them into bankruptcy if they don’t do this,” he said bluntly.

He also would require that the Voluntary Employee Benefit Association, the entity created by the car firms and the UAW to handle retiree health care benefits, accept stock in lieu of half the cash payments due. The carmakers had agreed to fund VEBA but can no longer afford to do so. “If a company goes bankrupt, these future payments are never going to happen anyway,” he said.

Finally, Corker’s bill would force the UAW to lower its members’ wages to the level of workers at the American “transplants,” the factories in Tennessee and other states owned by Toyota, Hyundai and other foreign car companies.

Notice he is going after the Union. Why?

Senator Corker, how’s that new Volkswagen plant going in Chattanooga? How about Nissan’s North American headquarters and Nissan plant in Tennessee?

Tennessee offered its richest incentive package — and perhaps the most government assistance and tax breaks ever for an American automobile plant — to lure Volkswagen to Chattanooga. How about $500 million in government assistance and tax breaks for VW alone?

Where was your outrage then Senator?

Then we have Kentucky Senator Mitch McConnell. I’m sure you know where this is going. McConnell said the bill would be more appealing if Sen. Bob Corker (R-Tenn.) could add amendments that would require the automakers to reduce two-thirds of their outstanding debt through an equity swap with bondholders as a condition for aid. Corker would also require the companies to reduce labor costs, and mandate that a portion of payments automakers make to labor unions consist of company stock.

Senator, how’s your Toyota plant, the largest plant outside of Japan? Senator McConnell claims Toyota is doing well, while their stock has fallen 50% since the beginning of the year.

Toyota makes hybrids in Kentucky, as well as other cars, yet Senator McConnell has led the charge to stop any legislation that would have pushed up CAFÉ standards, that would have driven the auto industry to higher MPG standards.

McConnell also voted FOR the $700B bailout of Wall Street.

Where was your outrage then Senator?

So, why are so many Southern Senators against loans for the (American) auto industry? Are they confused about the whole “Union” thing?

Peace,
J

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