But of course that was asking too much, because evidently the UAW prefers the risk of bankruptcy and mass layoffs to further pay cuts. Their excuse:
The sticking point apparently was the union’s refusal to agree to lower wage and benefit rates as soon as next year.
Representatives for the union, which had already accepted a series of cuts in its current contract, sought instead to push any more concessions back to 2011, when the U.A.W.’s contract with Detroit auto companies expires.
In a statement Thursday night, the union said it was “prepared to agree that any restructuring plan should ensure that the wages and benefits of workers at the domestic automakers should be competitive with those paid by the foreign transplants. But we also recognized that this would take time to work out and implement” using programs like buyouts and early retirement offers to bring in new workers at lower rates.
Would the union have agreed to Corker’s plan if they didn’t have Bush waiting in the wings to bail them out with TARP money? (Yup, says Corker.) After all, TARP is a sweeter deal for them than Corker’s bill since, as one White House source noted, the loans come with few strings attached. Thus have the inefficiencies of the initial Wall Street bailout made this bailout more inefficient, too. Watch, then read on.
Two points about all this. One: If Bush is going to bite the bullet and release the TARP money (legally or not), why not blame it on Obama? Call a presser, affirm that he opposes funding the Big Three without stringent restructuring requirements, then humbly declare that he doesn’t want to complicate life for the incoming administration by sinking the auto industry knowing they support a bailout. The media’s constantly whining anyway about the lag time between the election and The One’s ascension to the throne. Point to that and frame the bridge loan as a grudging measure necessary to an orderly transition.
Two: I made this point before in the context of the Wall Street bailout, but let me make it again. Is anyone in the GOP leadership weighing the costs of action versus the costs of inaction or are we running on pure dogma here? I keep thinking about Mitch McConnell saying yesterday that he’ll oppose the bailout even though it’s “impossible to know” what the consequences of bankruptcy would be. Hey, Mitch? Not good enough. No one’s asking for absolute certainty on the outcome, which really is impossible; what I want is a good-faith attempt at assessing costs, benefits, and probabilities of all courses of action. If they’re convinced that economic catastrophe is inevitable and don’t want to burn any more taxpayer money trying to deflect the asteroid, that’s fine. If, on the flip side, they think the consequences of letting the Big Three fail and losing a million jobs in this economic climate won’t be that bad, that’s fine too. Both are good reasons to oppose a bailout. But make the case. Explain to me why, in the middle of a global economic crisis, propping up a failing industry to save jobs at least until the crisis is over is a worse option than pulling the plug now. The prospect of being taxed to support a $100 billion rescue of the auto industry is awful, but not nearly as awful as the cascade effect of consumer purchasing power drying up and me losing my job as part of a $500 billion hit to the economy. Is that what we’re looking at here or is it something less, or more? My sense is that both sides are uninterested in exploring the question, and that our side is content to repose religious faith in the divine market to arrive at the least painful solution. Can I at least see some numbers before I take communion? If not, then this really is much a crisis of political leadership as it is a financial one.