MSNBC’s Tom Curry reviews one aspect of the debate over federal aid to the domestic auto industry, “‘Card check’ best hope for auto workers union?” The answer is surely no, of course not, are you serious? Mickey Kaus at Slate rebuts one argument by supporters of the Employee Free Choice Act:

The New Plan? Cripple Honda! Save Detroit with Card Check! Eliminating the secret ballot and making it easier to organize U.S. Honda and Toyota workers (and imposing contract terms via binding arbitration) would “level the playing field,” says Dem. Congressman Tim Ryan. … Then when Honda and Toyota responded by importing more cars from abroad, we could have import quotas! Eventually the whole automotive sector could be planned by Congress in conjunction with existing business and labor interest groups. Red State has seen the future and it is corporatist. …12:21 P.M.

The answer to Detroit’s problem is not to make other automakers in the United States less competitive through passage of the anti-democratic Employee Free Choice Act, forcing unwilling employees into unions that would impose rigid, costly work rules.

The story features another argument:

UAW ally Rep. Dale Kildee, D- Mich., who was represents Flint, Mich., the city where GM was born, said that joining a union is only the first step.

“After you get recognized, you still have to bargain,” he pointed out. “You can get recognized under the Employee Free Choice method or the election method. It’s what happens afterwards in the bargaining that really determines the differences (in wages).”

Actually, passage of the Employee Free Choice Act would discourage good-faith bargaining by newly recognized unions. If the union can prevent completion of a first contract within a brief 120 days, a federal arbitrator imposes — imposes — binding arbitration on the parties for two years. No negotiation or renegotiation is possible, even if the contract proves to be completely unfair to one side or another, even if the contract destroys a company’s ability to compete.

These are among the many, many reasons that employers regard the Employee Free Choice Act not just as anti-democratic, but also disruptive and destructive. To reaffirm those arguments, the Coalition for a Democratic Workplace this week sent a letter to members of Congress reminding them of them of the strong, even passionate opposition to the card check legislation.

From the news release and letter:

The Coalition for a Democratic Workplace, a group of more than 500 organizations, is united in opposition to the Employee Free Choice Act because we believe this bill severely undermines long standing principles of balance and fairness in federal labor law. Make no mistake; the purpose of EFCA is not labor law reform. The legislation is a dramatic assault on the rights of employees and employers that threatens to severely undermine any chance at a constructive dialogue on labor law reform.

The key provisions in this legislation represent egregious attempts to limit the rights of employees and employers and will severely diminish the ability of U.S. business to succeed in our globally competitive market.

The letter lists the members of the Coalition, which includes the National Association of Manufacturers. 

From CQ Politics:

Democratic leaders of Congress slammed the brakes on efforts by Rust Belt senators to push an auto industry loan through Congress this week, saying they first need to see a plan to make the industry viable going forward.

House Speaker Nancy Pelosi of California and Senate Majority Leader Harry Reid of Nevada, along with other key Democrats, said Thursday they will give the Big Three until Dec. 2 to submit a proposal in writing to Congress that shows a path to viability that will protect taxpayers and auto workers.

If they do, the Banking committees in both chambers will hold hearings that week, with floor action possible the week of Dec. 8 in a resumed lame-duck session of the 110th Congress.

“Until they show us a plan, we cannot show them the money,” Pelosi said.

The leaders made the announcement BEFORE the Senators Levin and Stabenow and Bond and Voinovich unveiled the proposal to allow the domesic auto industry to draw on previously appropriated $25 billion.

More to shake out, but todays’ developments are very puzzling: If leaderships insists on maintaining the requirements for “green” retooling, while protecting their political allies in organized labor, well, how much room for compromise and maneuvering and industry profitability is there? It sounds like this: “Show us a plan about how you intend to meet our political demands, which will make your failure more likely, and then we might dole out some more money.”

Perhaps we’re missing something. More…

• The Street.com, “Congress Wants Plan From Automakers Before Granting Aid“
• The Hill, “Dems want business plan from automakers“
• CNN.com “Dems want automakers to show bailout spending plan“
• Reuters, “Democrats set December 2 deadline for automakers’ to offer plan

UPDATE (4:15 p.m.): A statement from House Majority Leader Steny Hoyer, “Hoyer and Democrats Demand Auto Industry Be Held Accountable; Provide a Plan for Viability“:

As we said this afternoon, Democrats fully understand the importance of America’s automotive industry to our entire economy, and to the 3 million workers who depend on it for employment. We are working with leaders from both parties, and with representatives of the automakers and their employees, in an effort to protect this vital industry from collapse. However, we will not commit billions of taxpayer dollars to this effort without first knowing how the automakers intend to use it to ensure their long-term viability. Our taxpayers and our economy would suffer if we found ourselves back at this point in the near future, with $25 billion gone and the automakers no closer to health. A plan of this size demands detailed accountability to the public.
(continue reading…)

Washington Post, “As Support for Auto Aid Stalls, Efforts Shift to GOP Loan Plan“:

Congressional allies of the auto industry were rushing late yesterday to put together a bipartisan aid package for faltering Detroit car companies, but lawmakers said they may leave town today without taking action.

Senate Democrats abandoned plans to take $25 billion from the $700 billion financial rescue program enacted last month, acknowledging that they did not have enough votes. Detroit’s advocates quickly turned their attention to a Republican proposal to keep the car companies afloat.

That proposal, which was endorsed by the White House, calls for modifying a loan program created to help the automakers develop advanced technologies and retool factories to produce more fuel-efficient vehicles. Sen. George V. Voinovich (R-Ohio) said the money would be given to the automakers temporarily to fund day-to-day operations. But when the money was repaid, he said, the loan program would be used for its original purpose.

• Reuters, “Auto bailout prospects fade; last ditch effort made“
• Wall Street Journal blog, Real Time Economics, “Detroit’s Next Chapter: Three Possibilities“

And several local reax.

• Montgomery Advertiser (Al.), “What impact would proposed bailout have on Alabama?”
• Jim Brown column, Bayou Buzz, “Louisiana Economy Needs Automotive Industry Bailout“.

The prepared testimony from today’s House Financial Services Committee hearing, “Stabilizing the Financial Condition of the American Automobile Industry.”

Panel 2

• Mr. G. Richard Wagoner, Jr., Chairman and Chief Executive Officer, General Motors Corporation
• Mr. Robert Nardelli, Chief Executive Officer, Chrysler, LLC.
• Mr. Alan Mulally, President and Chief Executive Officer, Ford Motor Company
• Mr. Ron Gettelfinger, President, United Auto Workers 

Panel 3

• Mrs. Annette Sykora, Chairman, National Automobile Dealers Association
• Mr. James S. McElya, Chairman and Chief Executive Officer, Cooper-Standard Automotive, Inc.
• Professor Jeffrey D. Sachs, Director, The Earth Institute; Quetelet Professor of Sustainable Development and Professor of Health Policy and Management, Columbia University
• Dr. Matthew J. Slaughter, Professor of International Economics, Tuck School of Business, Dartmouth College

And relevant coverage..

• Big Three press bailout case for second day
  MarketWatch - 54 minutes ago
  If the domestic auto industry were allowed to fail, Wagoner said, “the societal costs would be catastrophic.” Congress is in a lame-duck session in part to …
• Democrats seek to lower expectations for bailout
  The Associated Press - 1 hour ago
  CEO Rick Wagoner told the House Financial Services Committee that collapse of the US auto industry could lead to a loss of 3 million jobs within the first …
• Jockeying Continues Over Aid to US Auto Industry
  CQPolitics.com, DC - 1 hour ago
  By Joseph J. Schatz and David Clarke, CQ Staff The Senate’s top Democrat Wednesday sought to shift the burden of helping the auto industry onto the White …
• Senate seeks compromise on auto bailout as CEOs testify for a 2nd day
  USA Today - 1 hour ago
  “There is a way forward that will help protect the jobs in the auto industry, while also protecting taxpayers,” McConnell, a Kentucky Republican, said. ..

The latter refers to a statement made by Minority Leader McConnell, “A Bipartisan Path Forward to Protect Jobs, Taxpayers“:

So let me suggest a bipartisan path forward that has not yet been offered by the majority. It’s a compromise being worked on by Senators Voinovich and Bond which repurposes funds already appropriated by this Congress to fund a $25 billion loan program for automakers to build advanced technology vehicles—coupled with new taxpayer protections and federal oversight of how the money is spent. This is a proposal which I believe has support from both sides of the aisle, and that actually has the potential to pass right now—not next year.

The Senate Banking Committee has not yet posted the prepared statements from yesterday’s hearing, “Examining the State of the Domestic Automobile Industry,” but the testimony  was available elsewhere:

• Rick Wagoner, General Motors, Chairman and Chief Executive Officer
• Alan Mulally, Ford Motor Company, Chairman and Chief Executive Officer (full prepared testimony here).
• Robert Nardelli, Chrysler, Chairman & CEO, Chrysler LLC
• Ron Gettelfinger, President, United Auto Workers

Don’t immediately see the statements from Sen. Debbie Stabenow (D-MI) and University of Maryland economist Peter Morici.

The three auto executives and UAW’s Gettelfinger are also slated to testify before the House Committee on Financial Services at 10 a.m. today, the hearing entitled, “Stabilizing the Financial Condition of the American Automobile Industry.”

The other panel should have its moments of interest:

• Mrs. Annette Sykora, Chairman, National Automobile Dealers Association
• Mr. James S. McElya, Chairman and Chief Executive Officer, Cooper-Standard Automotive, Inc.
• Professor Jeffrey D. Sachs, Director, The Earth Institute; Quetelet Professor of Sustainable Development and Professor of Health Policy and Management, Columbia University
• Dr. Matthew J. Slaughter, Professor of International Economics, Tuck School of Business, Dartmouth College

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…

• Auto executives take case for bailout to Congress Reuters
• Automakers head to Capitol Hill to plead case  MarketWatch
• Democrats propose $25 billion in loans for carmakers Los Angeles Times

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.

The air is crisp and cool in D.C. this morning, but the political atmosphere wafts miasmic as Congress returns to the Capitol to consider economic stimulus legislation. Maybe one last round of partisan recriminations will clear the air …

Judging by news reports, little in the way of stimulus will actually pass or be signed into law by President Bush. Rep. Barney Frank (D-MA) will announce his plan to loan money to the auto manufacturers, but in drawing from the previously passed TARP financial aid program, he’s run into opposition from the White House and prominent Republicans like Sen. Richard Shelby of Alabama.

Anyway…the headlines that caught our eye, including the Freep’s story that moved this morning:

Detroit Free Press, “White House refines position on auto aid“:

WASHINGTON — The White House stressed today that it supports help for the struggling auto industry, but believes it should not be taken from the $700-billion financial system rescue program.

As lawmakers were returning to a lame duck session to focus on the troubled industry, President George W. Bush’s chief spokeswoman issued a statement saying the administration “does not want U.S. automakers to fail.” She complained that reporting on the issue has involved “attempts to shorthand the administration’s position.”

Perino’s early morning statement also made clear, however, that the administration steadfastly opposes drawing funds from the bailout plan to help Detroit. She said the $25 million that Democrats favor taking from the rescue plan should come, instead, from a Department of Energy program previously approved to develop fuel-efficient vehicles.

Since below there’s a lengthy post surveying the debate over financial rescues and the auto industry, it’s probably worth noting again NAM statements on the issue.

NAM President John Engler on November 7 issued a statement, “NAM President stresses importance of stable auto industry in economic recovery”

The NAM’s Engler also touched on the auto industry and financing at a conference sponsored Monday by the New America Foundation. His remarks are here.

Two observations gleaned from longer commentaries…

From Mickey Kaus, Kausfiles:

Wouldn’t it be good PR if the UAW stepped up to the plate and unilaterally, voluntarily, offered a substantial package of givebacks in exchange for all that federal money (and maybe a cap on executive pay)? I don’t expect this to happen–for internal purposes, union leaders probably have to be seen as going down fighting for every dollar. But it would help get the money, no? [Also improve the unions' image and help them pass "card check"-ed Sorry I suggested it.] 

From an e-mailer to John Derbyshire, the institutional pessimist of the National Review Online, reacting to Derbyshire’s criticism of government aid to the auto manufacturers as another step on the road to nationalization:

We’re not just talking about engineers and assembly line workers being unemployed. GM spends $85 billion a year on components, and billions more on other equipment and services. It has the largest installed base of personal computers of any company in the world and the Warren Tech Center has supercomputers that are the envy of many governments around the world. If GM folds, it won’t just take down their automotive suppliers, it will hit companies like Microsoft, Dell, Cisco and Autodesk (publishers of CAD software), and hit them hard. As the collapse of the Detroit car companies cascades and ripples through the economy, we could see unemployment reach 15 percent or more. All those folks saying to hell with Detroit have no idea how much their own jobs may be imperiled.