11-20-08, 10:01 am

Original source: AFL-CIO Now

Testifying before the Senate Banking, Housing and Urban Affairs Committee this afternoon, UAW President Ron Gettelfinger didn’t mince words about the auto industry’s need for Congress to approve a bridge loan. The situation, said Gettelfinger, is critical. It is a crisis….If the Detroit–based auto companies are forced into liquidation, the consequences would be truly devastating, not only for UAW members, but also for millions of other workers and retirees across this nation, and for the entire economy of the United States.

Gettelfinger and the three top executives of General Motors, Ford and Chrysler called on the committee and Congress to approve a $25 billion emergency bridge loan to help automakers weather the current credit and economic crisis that has driven car and truck sales to the lowest level in 25 years.

The automakers have been forced to burn through their cash reserves, and news reports say GM could run out of money and be forced to shut down by the end of the year. As General Motors CEO Rick Wagoner told the committee: Our industry…needs a bridge to span the financial chasm that has opened up before us.…We’ve moved aggressively in recent years to position GM for long-term success. And we were well on the road to turning our North American business around. What exposes us to failure now is the global financial crisis, which has severely restricted credit availability and reduced industry sales to the lowest per-capita level since World War II.

Committee Chairman Christopher Dodd (D-Conn.) said if the automakers are forced into a bankruptcy, the repercussions would be severe….If a major industry goes down, it could take huge swaths of the nation’s economy with it.

The $25 billion package would be carved out of the $700 billion Wall Street bailout Congress approved in October.

Says AFL-CIO President John Sweeney: Our government moved quickly to help Wall Street because of its impact on the entire economy. With the American auto industry teetering on the brink of disaster as a result of the global economic recession, it’s equally critical to help families on Main Street by approving immediate assistance to Chrysler, Ford and GM.

Several Republican members of the committee said the car and truck makers should be left to fall into bankruptcy, and that labor contracts be thrown out and renegotiated with lower wages and benefits.

But as Gettelfinger noted, contracts negotiated in 2005 and 2007 reduced wages for active workers and cut health care benefits for retirees in “unprecedented ways…to help the companies remain competitive.”

Those contracts, said Gettelfinger, mean the labor cost gap between Detroit-based auto companies and the foreign transplants will be largely or completely eliminated by the end of the current contracts.

At Firedoglake, Jane Hamsher says the more vitriolic attacks on the auto industry recovery and workers’ wages and benefits have nothing to do with economic concerns, but rather with deeply held anti-union beliefs. All this screaming about bankrupting GM has everything to do with a conservative philosophical imperative that the free market will set all these things right, that unions are bad and they are an affront to free enterprise. It should have been thoroughly discredited by this point, but alas, some continue to cling to it. The problems being suffered by the auto companies right now are nothing more than a shock doctrine opportunity to destroy the UAW to them. They either have not come to terms with the fact that one in every 12 jobs in this country have income that is tied to the Big Three, or they simply don’t care.

The auto industry emergency loan legislation was attached to legislation extending unemployment insurance (UI) benefits for the long-term jobless that passed the House in October. That bill provides seven additional weeks of unemployment insurance for workers who exhaust their benefits, and adds six more weeks for workers in high unemployment states.

The bill also includes $37.8 billion to reduce states’ share of Medicaid costs, as well as $13.5 billion for building and repairing highways, bridges, airports and mass transit, thereby creating 470,000 jobs. In addition, there is funding for more than $3.3 billion in loan guarantees for advanced battery manufacturing and a temporary increase in food stamp benefits.

The Senate is expected to vote tomorrow on the legislation, but a likely Republican filibuster will force a vote that requires a 60-vote majority before final passage. The current Senate has only a slim Democratic majority.

Overcoming the 60-vote filibuster threshold was a major goal of the union movement’s Labor 2008 political mobilization efforts, and working family candidates gained seven seats in the Senate for a 58-vote majority in the next Congress. Two other Senate races remain undecided.

Click here to tell you lawmakers to support the auto industry loan package.

Gettlefinger and the auto executives appear before the House Financial Services Committee tomorrow.