No regrets on ‘no’ bailout vote

A Southern senator checked out GM models at the Detroit car show.

DETROIT (AP) — U.S. Sen. Bob Corker said Tuesday he doesn’t regret voting against a bailout for General Motors Corp. and Chrysler LLC last month because he and other Republicans had a plan to help the carmakers succeed.

Corker met with GM officials at the North American International Auto Show, where he looked at the models the automaker says are key to its future health now that the Treasury Department has allocated $13.4 billion in loans to keep the company alive.

The Tennessee Republican said he was “impressed” with the Chevrolet Volt electric car, which is due in showrooms next year.

“Being here makes me even more committed to working to make sure these companies change their capital structure to get these products to market,” he said.

Corker said it’s too early to tell whether the aid granted to GM, along with $4 billion to Chrysler, is enough to keep the companies from failing later.

GM Chief Operating Officer Fritz Henderson said Monday that GM’s worst-case scenario would require more cash than what Treasury has already allocated, and CEO Rick Wagoner said the Detroit automaker’s long-term viability is “not 100 percent” certain.

Many analysts say that because Chrysler’s sales have dropped so precipitously and it has no new models coming this year, the company will be forced to be acquired by another automaker or be sold off in pieces.

“It’s no secret Chrysler was looking to merge with GM in the fall, but I think GM has bigger fish to fry,” Corker said. “But it’s too early to tell whether Chrysler will make it.”

Corker was instrumental in leading the charge against GM and Chrysler’s request for billions in aid.

A bill to provide aid stalled in the Senate when concession talks with the United Auto Workers faltered, but the Bush administration stepped in and granted GM and Chrysler $17.4 billion in loans to keep them operating at least through March.

Corker had pushed the UAW toward a firm date in 2009 by which wages and benefits would be reduced to match those at foreign manufacturers’ U.S. plants — a demand that by all accounts was the deal-killer. But some of the provisions that Corker had pushed for ended up in the loan terms set by the White House.

GM and Chrysler have to hammer out amendments to their current labor contracts, get bondholders to swap much of their debt for shares of the companies, and make other cost cuts, or else the government can call in the loans at the end of March.

Corker said that he’s glad some of the provisions ended up in the Treasury Department’s terms but that the issue should have been resolved by Congress.

“If the UAW would have agreed to be competitive we could have gotten this done legislatively,” he said.

Corker said U.S. automakers’ labor costs must be comparable to those at foreign transplant automakers such as Nissan Motor Co., which has more than 6,500 employees in his home state of Tennessee.

Hourly wages for UAW workers at GM factories already are about equal to the average of $30 per hour Toyota Motor Corp. pays at its older U.S. factories, according to the companies. But including benefits and the cost of providing health care to retirees, the Detroit automaker says its total labor cost is around $69 per hour, compared with an all-inclusive cost of $53 per hour at Toyota, for example.

GM’s total cost will drop to $62 per hour in 2010 when a UAW-administered trust fund starts paying retiree health-care costs, with the remaining difference due to the “legacy” costs of century-old GM paying its retiree pensions.

Corker said he and other senators had planned in December to come to the auto show and see what the industry had to offer, but his trip was eventually prompted by a letter from Michigan Attorney General Mike Cox in the Washington Post inviting every member of the Senate to visit the show.