Onus is on Congress to treat U.S. automakers fairly

Onus is on Congress to treat U.S. automakers fairly

Two weeks ago, Congress chastised the CEOs of the three U.S. auto companies for coming to Washington in their private jets to ask for government loans to see them through today’s lean times. No doubt, the heads of General Motors Corp., Ford Motor Co. and Chrysler LLC could have been more sensitive to appearances in arranging their transportation and should have come with more details about how they intended to use the money and the changes they would make.

But that was then, and this is now. Today, the automakers will submit their proposals; the Senate will hold hearings Wednesday and the House on Friday.

Assuming that the companies submit proposals that respond to concerns raised by lawmakers last month, the onus is now on Congress to explain why it won’t provide the lifeline that U.S. automakers need.

Changing dynamics

Some things have changed since GM’s Rick Wagoner, Chrysler’s Bob Nardelli and Ford’s Alan Mulally were given the bum’s rush by congressmen eager to portray themselves as stalwart guardians of taxpayer dollars.

For one thing, Ron Gettelfinger, head of the United Autoworkers, has retracted his ill-advised comment that the UAW would make no further concessions. Concessions may be necessary all the way around, not only to convince Congress to provide a bailout, but to, in fact, save the Big Three automakers.

For another, it is increasingly clear that some of the most vocal opponents of a bailout of U.S. automakers are acting out of provincial political motives. We commented earlier on U.S. Sen. Richard Shelby’s disdainful attack on Detroit, noting that Shelby’s home state of Alabama is home to Honda, Nissan, Mercedes and Hyundai plants. The latest senator to announce he won’t support help for U.S. automakers is Sen. Lindsey O. Graham, R-S.C., who said, “I don’t believe it is a good idea to take $25 billion and give it to the three major car companies, which I think have a business plan that’s doomed to fail.” His state is home to a BMW plant.

Graham is one of those who blithely suggests that the automakers declare bankruptcy. But the bottom line remains that bankruptcy for any of Detroit’s Big Three would have disastrous consequences that would extend far beyond the hundreds of thousands of workers and their families who would be directly affected. The Pension Benefit Guarantee Corp. would be forced to assume pension obligations. The health care industry that would be saddled with more uninsured sick people. Auto dealerships and other creditors would lose billions of dollars owed to them by the car companies. Shareholders would lose their investments.

Double standard

Congress might be able to ignore all those reasons why it should provide the auto industry the help it seeks. But it cannot ignore the fact that in the two weeks since some of its members treated Wagoner, Nardelli and Mulally with something close to contempt, it has sat idly by while the administration has doled out hundreds of billions of dollars in additional bailout money to financial institutions. It was done without asking for justification or commitments by workers or managers that they will make concessions, or even detailed recovery plans.

While automakers are putting together a plan that will pass congressional muster, some bankers are using government money to buy other banks, and are giving officers of the banks they are buying out multimillion dollar golden parachutes.

If U.S. automakers go the extra mile to answer questions raised by Congress, they should get their aid. Or, to be fair, Congress should shut off the spigot to troubled financial institutions and not reopen it until every bank or mortgage house bailout gets the same scrutiny given the automakers.