US auto bailout battle intensifies

Democrats want government to advance $25bn in loans to help Detroit survive financial crisis.

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Republicans say ordinary taxpayers should not be made to pay for bailing out the auto industry [EPA]

Republican criticism

By contrast, Republican critics argued that the government should not be in the business of choosing which companies survive and which fail.

Richard Shelby, a senator from Alabama, said: “Companies fail every day and others take their place. I think this is a road we should not go down. 

Levin says he will call for a management shake-up to get the billout bill passed [AP]

“They’re not building the right product. They’ve got good workers but I don’t believe they’ve got good management.

“They don’t innovate. They’re a dinosaur in a sense.”

The second ranking Republican in the senate said that it is “pretty clear” the bailout proposal will fail in the senate.

Jon Kyl, senator from Arizona, told Fox News Sunday that the Democrats appeared to be trying to score political points by pushing the bill now “since it’s pretty clear that it’s not going to pass”.

He said they should wait until next year.

“The people who would be paying the bill for this, the average worker in the United States, I don’t think should be burdened with bailing out the auto companies that have been sick for a long time,” Kyl said.

Obama’s plan

Barack Obama, the US president-elect, said in an interview on CBS’s 60 Minutes that he believes that aid is needed but that it should be provided as part of a long-term ‘sustainable” plan.
“For the auto industry to completely collapse would be a disaster in this kind of environment,” he said.
“So my hope is that over the course of the next week, between the White House and congress, the discussions are shaped around providing assistance but making sure that that assistance is conditioned on labour, management, suppliers, lenders, all of the stakeholders coming together with a plan – what does a sustainable US auto industry look like?”

Carl Levin, Michigan Democratic senator and co-chairman of the senate auto caucus, said he saw bipartisan backing for helping the car sector survive the economic crisis.

He said the problem was “a different issue from the need to restructure the auto industry”.

Democrats’ view

Levin told NBC’s Meet the Press that he would support calls for a shake-up in the auto industry management in order to get the bailout bill passed.

Critics say management is to blame for Detroit’s troubles.

Byron Dorgan of North Dakota conceded it “might be the case” that congress would only be able to pass a more modest plan to expand unemployment benefits during the lame duck session before the new congress is seated on January 6.

“We are going to try to do more,” he told Fox News.

“This is not just about an industry or three companies. This is about jobs – 350,000 direct, probably as much as three to five million jobs in total,” Dorgan said.

“I don’t think you long remain a strong economic power in this world unless you have a manufacturing base.”

Source: News Agencies