[Congressional Record Volume 154, Number 185 (Wednesday, December 10, 2008)]
[Senate]
[Pages S10850-S10852]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          AUTOMOBILE INDUSTRY

  Mr. BROWN. Mr. President, almost a quarter million Ohioans are 
employed, directly or indirectly, by the automobile industry. The 
compromise bill we have negotiated--which I hope will pass tonight--
means much more than just bridge loans for auto companies. This 
legislation means hundreds of thousands of middle-class workers in 
Ohio, in Missouri, in Indiana, in Pennsylvania, in Michigan, and all 
over this country; hundreds of thousands of middle-class workers in my 
State will be able to keep their jobs--jobs for car dealerships in all 
50 States, jobs for suppliers in all 50 States. It means jobs at auto 
assembly plants and it means jobs at auto-stamping plants and engine 
plants in all those States I mentioned. It means communities would not 
suffer yet another blow from massive job loss. It means Ohio's economy 
and our Nation's economy will have a fighting chance to get back on 
track.

[[Page S10851]]

  Inaction means a present of pink slips for millions of American 
workers this Christmas. Bah humbug. There are some in this Chamber who 
would rather see our largest manufacturing industry go bankrupt rather 
than provide a bridge loan to success.
  Let's be clear about what this legislation will do. The legislation 
provides a bridge loan to auto companies, a loan that comes with strict 
oversight and with strict conditions--something, frankly, the Treasury 
Department did not do with the financial services industry. If the auto 
companies don't negotiate a real plan for restructuring their 
businesses, all the interested parties--that means the auto dealers, 
the suppliers, the bondholders, the workers, management--if they don't 
negotiate a real plan for restructuring their businesses with all the 
interested parties, then the loan gets called in March or in April. 
This is not handing a checkbook over to the industry to make out 
whatever they think is fair. This legislation means accountability. It 
means transparency. It means no more corporate jets. It means no more 
golden parachutes when they hit turbulence. More importantly, passing 
this legislation means saving millions of jobs nationally, hundreds of 
thousands of jobs in Ohio and Michigan, and tens of thousands of jobs 
in Pennsylvania--as I said, millions of jobs all over this country. 
This legislation means the potential, as the industry gets better and 
better--and it has shown improvement in the last couple years--it means 
the potential for new job creation.
  This bipartisan compromise legislation will help ensure the long-term 
viability of the most important component in U.S. manufacturing--the 
auto industry. It will help ensure global competitiveness. It will help 
ensure and promote energy efficiency by developing advanced technology 
vehicles.
  Let me say it again. This legislation will save jobs. This bill is 
about jobs. It is about creating a middle class and strengthening the 
middle class. It is about jobs.
  Back in November, the auto companies were given the task of 
developing detailed plans of how they would use taxpayer support and 
whether we, as Members of Congress and as the public, could have some 
assurance they would be able to survive and ultimately thrive. They 
submitted their plans on December 2, and they gave detailed proposals 
of how they will return to profitability. There are no absolute 
guarantees their plans will succeed, nor can there be guarantees. But 
based on reasonable assumptions--again, a much higher standard than the 
financial institutions to which the Treasury Department has handed 
hundreds of billions of dollars--based on reasonable assumptions, these 
auto companies will return to financial health, and they will repay the 
Federal loans they are seeking within a few years' time.
  Thirty years ago, Chrysler borrowed more than $1 billion. They paid 
it back. The Government made money. They paid it back, in fact, more 
quickly than the Government asked them to initially. In the last month, 
the auto companies, dealing with us in this Congress, have done their 
part, and now it is our turn. We have two choices. We can either 
provide bridge loans to the auto industry or we can drive the economy 
off a bridge.
  Seldom are the consequences of inaction so clear. If we do nothing, 
there will be a cascade of bankruptcies, not just in Detroit but across 
the country, including in the Presiding Officer's State of Missouri, in 
my State of Ohio, and across the country.
  Last week a steelmaker in Cleveland announced that 450 men and women 
need not come to work on Monday. Another week before that, in 
Lordstown, OH, GM announced a layoff of some number of autoworkers at 
the Lordstown GM assembly plant and, within days, major suppliers also 
announced layoffs. Some 40 percent of production goes to the auto 
industry from the steel plant I was talking about. It is already 
competing in an industry where foreign governments subsidize hand over 
foot.
  What happens to that steel mill if one or all of the big three go 
bankrupt?
  These layoffs are not just numbers. A young woman from Youngstown, 
near Lordstown, wrote me about how her family moved off welfare when 
her father found a job when GM was hiring. She said the interview and 
testing process was extensive and the stakes for her family immense. 
When her father got the job, he was so happy he cried tears of joy. As 
somebody recently hired, she fears for her father and her family. The 
tears may soon be those of sorrow.
  Next week, Lordstown workers will conduct their annual food drive, 
feeding hundreds of families through the holidays. They contribute a 
third of the United Way budget. This plant contributes a third--these 
workers--to the United Way budget. They keep the hardware stores open. 
They keep the restaurants open. They fund the public schools with tax 
dollars. They keep firefighters on the street, police officers on the 
street.
  My colleagues may not appreciate the dramatic changes that have taken 
place in this industry. Employment, as a whole, has been cut in half. 
Productivity has started to match or exceed the foreign transplant 
factories. The UAW has agreed to extraordinary reductions in the pay 
and benefits of autoworkers in 2005, again last year, in 2007, and 
again now. The UAW has been a partner in these negotiations, as 
outlined by UAW President Gettelfinger to the Banking Committee only 
last week, and in putting the industry on the path to match the costs 
of the competition.
  If we fail to act, the consequences will be felt throughout the 
economy--in the credit markets, the supplier industries, even the local 
newspaper.
  A little over 2 months ago it was the banking industry that faced a 
crisis with an urgent need for Federal help. As I said earlier, the 
differences in how we responded to the two crises are striking. The 
banking industry, initially, through the Secretary of the Treasury, 
gave us a three-page plan, a three-page bill for spending $700 billion. 
We obviously threw the three pages out because we wanted much more than 
that, but the revisions that came a week and a half later passed this 
Senate by a vote of 74 to 25.

  The financial companies themselves, five of which have received more 
than $25 billion each, not only did not appear before Congress, they 
never produced a plan on how they would spend the money, nor had they 
been asked for one by Congress or the Bush administration. Contrast 
that with what we have talked about for the auto industry. They didn't 
have to testify about why they built or marketed structured investment 
vehicles, but we have heard plenty of debate about the building and 
marketing of sport utility vehicles.
  The idea Secretary Paulson and Chairman Bernanke made before the 
Senate Banking Committee on behalf of the banking industry is it needed 
what it called patient capital that only the Federal Government could 
provide. The banking industry--Secretary Paulson and Chairman Bernanke 
told us--was in peril, but given Federal support, in a few years' time, 
it would be back on its feet. I don't quarrel with the need to help the 
banking industry, though I have plenty of concerns for the way we are 
proceeding. The need here is exactly the same in the auto industry, 
even though the standards for transparency we are setting are almost 
literally contrasted like night and day. The auto industry has been hit 
by the same collapse in the credit market that brought Secretary 
Paulson and Chairman Bernanke to Capitol Hill on behalf of bankers. It 
has the same need for patient capital, a bridge loan to take it to the 
other side of the recession.
  We know this can work; we have seen it work in the past, but we have 
no basis to believe people will buy cars from a company in bankruptcy. 
That is why we can't let it go to chapter 11 bankruptcy. A structured, 
prepackaged bankruptcy--whatever term the lawyers in this body wish to 
use--if it goes into bankruptcy, people would not buy cars in 
sufficient numbers to get this industry back on its feet.
  As we saw with the collapse of Lehman Brothers, standing by while a 
company goes bankrupt would send shock waves to unexpected places 
throughout the economy. It was a terrible mistake that Secretary 
Paulson let Lehman Brothers collapse. It would be a terrible mistake if 
the Treasury Department doesn't step up--which apparently they will 
not--but it would be a terrible mistake if now the House and Senate do 
not step up.

[[Page S10852]]

  If we fail to act, years from now some future Professor Bernanke, now 
Chairman of the Fed, will study our actions and will absolutely marvel 
at the missed opportunity--trillions of dollars committed to the 
financial sector, tens of billions denied the manufacturing sector, 
with millions of people losing their jobs on top of the more than 1 
million who have already been laid off this year. If we fail to act, we 
will commit one of the biggest economic sins of omission in our 
history.
  Majority Leader Reid is absolutely right to insist that we stay here 
as long as we need to get this job done. Let's make it a truly merry 
Christmas in millions of living rooms in Lordstown, in Walton Hills, in 
Toledo, in Dayton, in Sharonville, in Mansfield, in towns all across 
the State.
  I yield the floor.

                          ____________________