Congress and the Auto Industry, a Round-Up

By November 18, 2008Labor Unions

The Senate Banking Committee holds a hearing today at 3 p.m., “Examining the State of the Domestic Automobile Industry.” Following a statement by Senate Debbie Stabenow (D-MI), the second panel witnesses are:

  • Mr. Ron Gettelfinger , President, International Union, United Automobile, Aerospace and Agricultural Implement Workers of America
  • Mr. Alan Mulally , President and Chief Executive Officer, Ford Motor Company
  • Mr. Robert Nardelli , Chairman and Chief Executive Officer, Chrysler LLC
  • Mr. G. Richard Wagoner , Jr., Chairman and Chief Executive Officer, General Motors
  • Dr. Peter Morici , Professor, Robert H. Smith School of Business, University of Maryland

 And the latest news…

Meanwhile, the Detroit News leads with this story, “Gettelfinger: No wage or benefits cuts,” based on the union leader’s prepared testimony from the hearing. Gettelfinger:

We do not believe there is any justification for conditioning assistance to the Detroit-based auto companies on further deep cuts in wages and benefits for active and retired workers. We would also note that in the cases where the Treasury Department has acted to rescue financial institutions, it has only imposed restrictions on executive compensation. It has never mandated cuts in wages or benefits for rank-and-file workers and retirees. Thus, there is no basis for singling out the auto industry for different treatment.

Gettelfinger also rebuts arguments for a bankruptcy as the appropriate approach. Again, from his prepared testimony:

Consumers will not purchase vehicles from a company that has filed for bankruptcy. And bankrupt auto companies would not be able to obtain ‘debtor-in-possession’ financing to enable them to continue operations. Thus, the stark reality is that these companies would be forced into a Chapter 7 liquidation, with their operations ceasing entirely and their assets sold for pennies on dollar.

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