[Congressional Record (Bound Edition), Volume 154 (2008), Part 18]
[Senate]
[Pages 24522-24525]
[From the U.S. Government Publishing Office, www.gpo.gov]




                      AMERICAN AUTOMOBILE INDUSTRY

  Ms. STABENOW. Mr. President, obviously we have been in negotiations 
with a tremendous amount of work going on around the question of the 
American auto industry and the position they find themselves in as a 
result of, first of all and foremost, a global credit crisis. So I 
stand here today on behalf of hundreds of thousands of incredibly 
smart, productive, working men and women in Michigan and the millions 
of others around the country who design, build, service, finance, and 
sell American-made automobiles and have done so now for over a 
generation--the people who not only build the parts that are given to 
the auto industry but to the vehicles that our brave men and women 
drive right now in Iraq and around the globe, those who have built 
America and the American middle class, those who advertise and market 
and are engaged in so many different ways in the foundation of American 
manufacturing, which is the American auto industry.
  I also wish to speak on behalf of Americans today who have benefited 
from a great American middle class, built on the notion that we don't 
just move paper around on Wall Street, we actually make things and we 
grow things. I know the distinguished occupant of the chair, from 
Pennsylvania, understands that, coming from a great State that makes 
things, grows things, adds value to it, people who work hard every day. 
The shower they may take is after work rather than before work, but 
they are just as valuable--and, I argue, maybe more valuable--in terms 
of creating economic vitality and strength of an American middle class. 
That is why every other country in the world looks to us and is rushing 
to support their auto industry and manufacturing, to create what we 
have had in America as a result of hard-working

[[Page 24523]]

men and women in the auto industry and other parts of manufacturing. So 
that is really why we are here.
  I thank our leader for his incredible diligence and patience. Senator 
Reid understands the importance of this issue. He understands what is 
at stake in terms of 3 million Americans and their jobs and the broader 
impact on the economy. I thank him for his incredible leadership.
  I thank the Speaker of the House for coming forward and being willing 
to negotiate and be a part of the solution and for the great leadership 
she is now providing and will be providing in the House.
  I also thank our chairman, Chris Dodd, who has had, as chairman of 
the Banking Committee, so many things he has had to confront, from the 
housing crisis, where he was way ahead in calling for action that we 
now know should have been done back when he called for it to be done, 
as well as his willingness to work with us now on the other piece for 
Americans. Most Americans invest in a home, and they hope they will 
have equity that will help them in retiring or taking care of their 
children's college education or will be there in an emergency. The next 
thing they buy is their automobile to get them to work, to get the kids 
to school, to go on vacation, to be able to enjoy the American dream. I 
thank Chairman Dodd because he has had crises in both of these 
incredibly important industries to our economy and to American families 
placed at his doorstep. He and his staff have done an amazing job.
  I also say that for Chairman Barney Frank, for the same efforts and 
willingness to focus on people on Main Street--the majority of 
Americans--not just on Wall Street. That is what this is really all 
about.
  I thank the Republican colleagues who have been and will continue to 
be involved. Senator McConnell has been working and raising legitimate 
issues relating to accountability, transparency, things that are 
resolved, I believe, in this work that will be coming before us. I 
thank the White House for working with us in good faith, and Senator 
Voinovich and Senator Kit Bond--all of those who care deeply and have 
come together in what is a bipartisan bill that is in front of us.
  Mr. President, how did we get here? There are a lot of scenarios. I 
understand people who are mad at the industry for making the Hummer and 
are mad at decisions made 10, 15, 20 years ago, and some think workers 
get paid too much. I don't agree with them. All kinds of perspectives 
have come together to make this a difficult issue to deal with.
  What is lost, unfortunately, in all this is the real story of today's 
auto industry. This is not your father's factory. These are people 
producing the marquee vehicles in quality, competing, winning awards, 
and are highly productive. They are the envy of the world in 
productivity. These are companies that have turned the corner and are 
rushing to the fuel efficiency vehicles. We could argue that it is not 
fast enough. I argue it is not fast enough. The early decisions should 
have been different, but they now find themselves in a situation where 
they are doing exactly what we want them to do. We have passed a 40-
percent increase in fuel efficiency standards. We put in place in the 
fall funding for a provision, which I was proud to champion, in the 
Energy bill to help keep the jobs here in America, poised to take major 
costs off of the industry by the United Auto Workers stepping up and 
being willing to take the risk on retiree health care, to move it off 
of the employer, and a major focus on a year from now when the new 
vehicles will be coming out and retooling is happening. Everything is 
moving just as we would want it to be.
  And then a global credit crisis. We know about that because of the 
major debate and what we were asked to do by this administration, to 
step up in an unprecedented way to be able to address this crisis. 
Unfortunately, money that was given to the banks has not been lent. I 
have suppliers that I have met who are not able to get the financing 
they need. We know dollars given to Wall Street have not made their way 
to the financing arms of the auto industry, to people needing the 
loans, to auto dealers, and so on. We also know in a global credit 
crisis that this is not just in America. All around the world now, we 
are in a situation where there is the perfect storm that is occurring. 
So we look at a result of the tight credit crisis and low consumer 
confidence right now and the concern, frankly, we start seeing that 
someone may go bankrupt and people hold back on buying a car. So the 
whole debate we are having is actually making it worse, unfortunately, 
even though we have to have a debate.
  In November, auto sales dropped more than 30 percent--can you imagine 
any business that sees a 30-percent drop from a year ago--the worst 
month in 25 years for the second straight month. This is not just the 
domestic automakers. Yes, GM sales dropped 41 percent; Chrysler, 47; 
Ford, 31. Toyota dropped 34 percent, the folks they are always compared 
to, as somehow they are magically more efficient, which is not true. 
Toyota dropped 44 percent; Honda, 32 percent. The reality is, this is a 
global credit crisis.
  We have a severe global credit crisis, consumers unwilling or unable 
because they have lost their job--they are cutting back--to purchase a 
vehicle, and it has hit capital-intensive companies the hardest. We can 
talk to those who make washing machines or refrigerators or furniture 
and so on. These are capital-intensive companies. Here we go, we can 
say, we shouldn't make anything anymore. Instead of worrying about 
foreign oil, let's worry about foreign tanks. See how many folks want 
to give us a tank in the war. Let's worry about foreign furniture, 
refrigerators, batteries. We are America, the greatest country in the 
world. We don't need to make anything. We can trade credit swaps. 
Obviously, that makes no sense. This is about where we go as a country 
in terms of our basic industries.
  Automakers in Great Britain, China, Japan, Brazil, and the European 
Union have all asked for help and are getting it, by the way. They are 
receiving it. French President Sarkozy has introduced a $25 billion 
strategic investment fund because they understand they want an 
automobile industry in France and how important it is to their economy, 
and they want to compete with us. The European Investment Bank is 
considering $51 billion in loans. China has done the same kind of thing 
for Chery Automobile. Brazil has stepped up. Australia has stepped up. 
You can go right around the globe. It seems that everybody, but some 
here understand this is more than just penalizing a company you are mad 
at. This is about the underpinnings of our economy and fundamentally 
whether we are going to compete with every other country and make 
things in an advanced manufacturing economy that we are in right now.
  Everyone understands we are in a race. Everybody else is racing, 
giving hundreds of millions of dollars to their companies, government 
funding for innovation. We don't do that. We put it on the backs of the 
companies. Every other country funds health care differently. Their 
companies don't have to have health care costs. Our companies pay for 
it.
  We can go right across the board when we talk about parity, how we 
need to get parity. I am all for parity, if we look at the full 
picture. Parity includes saying to South Korea that sold over 700,000 
vehicles to us last year: You have to let more than 6,300 American cars 
into your country. We did have a big discussion about parity. I welcome 
it. I have stood on this floor more times than I can count to talk 
about parity. But that is not what this is about. This is about a 
global credit crisis.
  The question is: Does it matter if we have an American auto industry? 
Is it important to make cars in America, trucks in America, tanks, the 
Stryker? Is it important to make airplanes? Or as long as we can buy 
them it doesn't matter? I hope the answer is, yes, we need in America a 
manufacturing base, an auto industry.
  One out of 10 jobs in this country is auto related--1 out of 10. In 
the middle of the biggest recession since the Great

[[Page 24524]]

Depression, can we afford to say: 1 out of 10, it doesn't matter. I 
certainly hope not.
  Our country lost 533,000 jobs just in November, bringing our 
unemployment rate nationally to 6.7 percent, which, by the way, we in 
Michigan would take that 6.7 percent and I bet you would too. We are in 
the heart of where this global economic crisis has hit.
  The domestic auto companies provide health care and pensions to over 
a million retirees and their families which, by the way, if anybody 
goes bankrupt, open your checkbook because the Federal Government is 
going to take over those payments.
  When we talk about what happens if only one of these companies goes 
bankrupt and the cost to the taxpayers, it will make the numbers we are 
asking for in a loan look like pennies, look like nothing. That is the 
reality of where we are.
  Motor vehicle parts suppliers provide over 780,000 direct employment 
jobs, contributing 4.5 million private industry jobs and 5.5 percent of 
all manufacturing jobs. When we stop and think about it, there is more 
computer power in our automobiles than anything else we own. When we 
talk about Silicon Valley, their customers are automation alley--
Michigan. Think about what is in your automobile--the computer power, 
the radios, the leather, and the cloth for the seats, the tires, the 
glass. I can go on and on. It is all connected.
  In fact, the U.S. military relies, for instance, on Chrysler Cummins 
B series engine, which is commonly known as the Dodge Ram, for uses as 
both propulsion and electric generator power. This is one example of a 
production line that has to be kept open for our national security. Let 
me give other examples for the military.
  Even for my colleagues who don't care about the domestic auto 
industry but care very much about defense and national security and 
what is happening to our brave men and women around the world, 
ArvinMeritor, a major supplier to all three automakers, has been a 
major supplier of axles to the Army for its 2\1/2\ and 5-ton vehicles 
for over 50 years. Axles--it makes sense--tank axles, truck axles. It 
makes sense. Do you think their major auto customer can go bankrupt and 
not pay them and have them continue to do business in this economy. 
Highly unlikely.
  Goodyear Tire, GM's second largest tire supplier, has supplied tires 
for the U.S. military for over 100 years.
  Navis, a key supplier of engine technology to Ford, produces a 
variety of widely deployed military trucks and light vehicles, 
including the MRAP. Where have we heard about the MRAP? A key supplier 
of Ford supplies the MRAP, the Mine Resistant Ambush Protected Vehicle, 
the deployment of which was, by all accounts, pivotal in the Iraq 
campaign. Ford supplied technology--the joint light tactical vehicle 
and the future tactical truck system.
  Dana Corporation is a leading supplier of highly specialized axles to 
both the American auto industry and the military.
  I could go on and on.
  The point is, you don't shut down one piece of this and not have it 
affect everything else. This is a case of dominos going right across 
the country to every single person's State.
  The failure of our industry would have debilitating ramifications for 
our entire industrial base and undermine our ability to respond to 
current and future military challenges.
  As I indicated, other countries understand and have been investing 
huge amounts of money to get ahead of us in a number of areas, 
including the battery technology we all want in America for that next 
generation of hybrid vehicle, that electric vehicle about which we are 
all talking.
  Germany has announced the Great Battery Alliance which will invest 
$160 million in advanced lithium-ion batteries,
  South Korea will spend $700 million; China also. India has developed 
an automotive mission plan. We don't even have a manufacturing strategy 
today for America. Our strategy is: Hey, they can't make it on their 
own, we will go buy it somewhere else. That is just batteries. That is 
not all the other pieces.
  We could go into health care and what is happening in trade and what 
has happened.
  I have heard colleagues--and I am sure we are going to hear it 
again--say: Just let them go into bankruptcy. They will reorganize, 
restructure, come out a stronger company, and go forward. 
Unfortunately, in the automobile industry, it is not the same as a 
bankrupt airline. I flew on an airline in bankruptcy. You buy a ticket, 
you take one flight. That is it. That is different. This is the second 
most important purchase a family makes. You want to look at whether 
parts will be available, will they be able to meet their warranties. It 
is a whole different situation in automobiles.
  The Center for Automotive Research, in looking at this very closely, 
found that if one or more of the top three automotive companies files 
for bankruptcy, we can expect about 2.5 million lost jobs, direct job 
losses, as well as a number of other industries about which I talked.
  How tragic and, I say, outrageous, at a time when we have a wonderful 
visionary new President coming in, carrying all the hopes and dreams of 
all of us, talking about creating 2.5 million jobs next year, to have 
all that wiped out by our inability to come together and address this 
situation this week. I am optimistic we will come together and do that. 
It would certainly be a blow to the hopes and dreams of the American 
public of creating new jobs for next year and beyond.
  I talked about the fact that suppliers would be affected. I have had 
very specific conversations with those who indicated very specifically 
the companies--and I will not name them, but if we saw a company go 
into bankruptcy now, the suppliers that would immediately begin to 
follow suit, suppliers that supply the Department of Defense, 
aerospace, other parts of the economy.
  We are seeing that suppliers, particularly with all the talk of 
bankruptcy now, find themselves in a situation where matters are even 
worse, of banks not being willing to give loans. The questions in the 
hearings I would like to have of the folks who have already gotten 
taxpayer money is where are they in trying to be a part of the solution 
right now, people who have not had to go through what this industry has 
had to go through.
  I certainly welcome accountability and transparency. It would be nice 
if it was on everybody getting Federal money. But the reality is we 
have suppliers that cannot get their upfront funding. They are now 
having to turn to the automakers to ask for prepayment, where in the 
past they waited until the product was shipped and then they would have 
120 days or longer to make the payment. From a cash-flow standpoint, 
suppliers are saying: We need the money upfront, which makes the 
situation even worse.
  This is a complicated situation which is, in fact, only going to be 
made worse if we cannot provide a short-term bridge loan.
  Let me also say, as I wrap up, I mentioned before about taxpayer 
funding, the billions of dollars in liability we will assume in 
pensions, health care, unemployment costs, Medicare and Medicaid, and 
the lost taxpayer dollars. Bankruptcy would result in the reduction of 
personal income of $276 billion--much more than $15 billion in a bridge 
loan we are talking about--which would lead to a total Government loss 
of $108 billion over 3 years, not to mention States borrowing.
  The reality is this bill, I believe, is a fair and reasonable 
compromise that reflects the global credit crisis that allows a short-
term bridge loan until the end of the first quarter but then sets up 
rigorous oversight and transparency with requirements to come to the 
table to make the changes that are being talked about by colleagues, 
legitimate issues that have been raised about the need to restructure, 
deal with lower capacity, and continue to deal with costs on all sides. 
That structure is being put in place to do just that. The overseer, or 
the person now being dubbed the ``car czar,'' can actually recommend 
that the dollars not continue during

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that time period if they are not making progress on all of the areas 
that have been put together in terms of criteria. And no additional 
dollars would be given unless people were satisfied by March 31 that in 
fact there was long-term viability, that restructuring had been done. 
This gives us an opportunity to have the restructuring that is needed 
to create or to sustain an American automotive industry and American 
manufacturing in this country. It makes sense.
  A lot of tough negotiations have gone on. This is a tough bill on 
accountability, it is tough on oversight. It is much tougher than 
anything that anyone on Wall Street has been asked to do, that is for 
sure. At the same time, it recognizes that we are in a global credit 
crisis and that the ability for them to borrow--to get a loan for a 
short period of time--is essential if we are going to have American 
manufacturing.
  Mr. President, I hope we are going to come together. I know the House 
intends to vote, and we will be coming together to vote on this issue. 
I hope we will see a resoundingly bipartisan ``yes'' for a commitment 
to the middle class of this country to advance manufacturing for the 
future and that we will make sure people's feet are kept to the fire, 
that the right things are done, but that we will not give up on the 
middle class of this country. We are not going to give up on 2\1/2\ to 
3 million people who are watching everything we are doing now to 
determine whether they have a future for their families that will give 
them a living wage and allow them to continue to be a part of this 
great American dream. I hope we are going to come together. I am 
optimistic that we will come together in the next couple of days and 
say yes and allow a whole lot of people to have a holiday season, a 
Christmas, that will allow them to know they have a future.
  Mr. President, I yield the floor, and I suggest the absence of a 
quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. DORGAN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DORGAN. Mr. President, I ask unanimous consent to speak for 20 
minutes in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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