Will the Minn. delegation support the auto bailout?

Categories: Politics

General Motors, Ford and Chrysler (known as Detroit's Big Three) are begging Congress for a $25 billion government rescue as the auto industry sputters to a stall. Congress, as well as the rest of America, is going through some serious bailout fatigue, but now that they've bailed out investment firms, there is now a slippery slope of other industries who will be looking for handouts.

So how do some of the top Minnesotans in Congress feel about this? We've pulled together some of their comments for the last week.

The bailout could bring some benefits close to home. St. Paul houses a large Ford plant in Highland Park that has been on and off the chopping block for several years due to Ford's slumping sales.

Republican Gov. Tim Pawlenty opposes the bailout, saying it is unfair to save certain industries and not others, according to the St. Cloud Times.

"It's distasteful to bail them out," he said in an interview while attending an education conference at Georgetown University. "I think it just ticks people off for understandable reasons."

Pawlenty said General Motors and the U.S. auto industry "failed to modernize" and "now the chickens are coming home to roost."

"What we have is this unfortunate triangle of big business, big government and big labor mutually enabling each other to continue practices and behaviors that are unsustainable, irresponsible and in some ways reckless, to the disadvantage of everyday Americans," Pawlenty said.

"It just shows the unfairness and hypocrisy that comes with this approach," he said.

Republican Sen. Norm Coleman says he supports the plan if it includes taxpayer protection, according to the Associated Press.

Coleman says in a written statement that Congress should insist that Ford Motor Co., General Motors Corp. and Chrysler LLC work on developing new vehicles that function on new energy resources.

He says the automakers need to change their business models and ensure that labor unions are part of the solution.

The Minnesota Republican also would want any rescue plan to have caps on executive compensation.

Coleman is meeting with a Ford executive today to talk about the bailout, says Minnesota Public Radio.

Democratic Sen. Amy Klobuchar says she is "inclined" to support the bailout, according to the Associated Press. She is also meeting with a Ford executive today.

Democratic Rep. Jim Oberstar, a House transportation heavyhitter, also supports the bailout, says the Duluth News Tribune.

However, Oberstar said he wants a bill just for the auto industry — not one that takes money out of the $700 billion already designated for financial rescue.

The earlier package “does not include enough safeguards for taxpayers,” Oberstar said. “It would have to be modified before it could be used to bail out the Big 3 automakers.

“Congress should pass separate assistance package for the auto industry, in the spirit of and along the lines of the 1978 legislation that saved Chrysler from financial collapse,” Oberstar added.

St. Paul Mayor Chris Coleman also supports the bailout and hopes it would save the Ford Plant in his city, according to MinnPost.

"The value of this plant cannot be understated. The Ford plant has provided generations of our residents the ability to own a home, pay for college, and live the American dream in Minnesota. We are also fortunate to have a strong workforce at this plant, which continues to set the standard for innovation and efficacy at Ford," he wrote.

Republican Rep. Michele Bachmann didn't support the first bailout and she definitely doesn't support this one, according to her Townhall blog post. Her reason? The Big Three pay their employees too much.

For years, the American auto industry has struggled to keep up with foreign manufacturers like Toyota, Honda, and Nissan. CEOs at Ford, GM and Chrysler have operated using outdated business models, failed to invest wisely in new products and technology, and were not prepared for the massive rise in gas prices that scaled back their truck and SUV sales dramatically.

But besides the Big Three’s lack of innovation and mismanagement problems, the Big Three have labor costs that are far higher than their global competitors. Their CEOs failed to take on union bosses – and as a result millions of jobs could be in jeopardy. Ironic, isn’t it?

The Big Three pay out an average of $30/hour more than their competitors, including pension and health care costs for hundreds of thousands of retirees.

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