[Congressional Record (Bound Edition), Volume 154 (2008), Part 18]
[Senate]
[Pages 24719-24725]
[From the U.S. Government Publishing Office, www.gpo.gov]




                       AUTOMOBILE INDUSTRY CRISIS

  Mr. VITTER. Mr. President, I stand to again address the key issue 
before us that affects so many Americans, American families, and indeed 
all of us, through our economy: the proposed U.S. auto industry 
bailout.
  Yesterday, I stood here and announced two conclusions I was driven to 
reach. First, I would have to strongly oppose the bailout package in 
its present form because I don't think it demands the fundamental 
restructuring it will take for those companies to survive. Second, 
because of that very point, I would use every procedural tool available 
to block, stop, and delay that package from passing into law.
  I, again, reached those conclusions. I restate that commitment for 
one very simple, very compelling reason--because so much is at stake; 
because we need to get it right; because millions of individual workers 
and families, and indeed all of us, through our economy, will suffer 
the consequences of our not taking appropriate action.
  Again, let me be clear, I am not trying to block this package in 
spite of job losses that would occur if these companies went down. I am 
trying to block this package because of that, in light of that, because 
this package doesn't demand the fundamental core restructuring that is 
absolutely necessary for these companies to survive.
  This package puts those companies down a road where I believe that is 
unlikely to ever happen. It would throw a lot of taxpayer dollars at 
the problem to buy time, but it doesn't change the endgame, in my 
opinion.
  Let me also make clear, having said all that, I am not for doing 
nothing. I am not for going home and forgetting about this and walking 
away. This is a serious crisis we must address. I am for doing 
something, but the right thing, the right way, something that will 
ensure, demand the fundamental core restructuring it will take for 
these American companies to survive.
  What do I mean by that? I could support a few alternatives. Let me 
outline two specific alternatives that are being worked on now, that 
have been developed, that are being discussed by many Members that I 
could support. First of all, I could certainly support a strong, 
comprehensive alternative being developed by Senator Bob Corker of 
Tennessee and others. That proposal wouldn't throw $14 billion at the 
company before any outline of a restructuring plan is agreed to. It 
would say: No, we need to agree and nail down and ensure some of those 
fundamentals now, before any taxpayer dollars go to those companies.
  What are those fundamentals? Senator Corker outlines four that I 
agree are at the core of the issue and must be nailed down before any 
taxpayer dollars should go to those companies.
  First, his proposal would require that participating companies reduce 
their outstanding debt obligations by at least two-thirds by forcing 
the companies' bondholders to accept an equity swap or debt for debt 
and equity swap--in other words, for the taxpayer dollars we would be 
sending to those companies not to boost the take, not to boost the 
value of bonds for those bondholders, but for the bondholders to 
contribute something up front to reduce the debt of the companies. That 
is crucial because right now those companies, particularly GM, are 
drowning under unbelievable debt, and that alleged loan would be on top 
of that. So that is crucial.
  Second, we would agree up front that the companies would become more 
competitive by requiring that all-in labor costs and work rules would 
be immediately on par with other automaking companies such as Nissan, 
Toyota, and Honda. Obviously, a major source of the uncompetitiveness 
of the three U.S. automakers is their labor costs. They cannot possibly 
compete in this global marketplace when their costs are way, way 
higher, 80 percent higher than competitors such as Toyota, Honda, and 
Nissan. This aspect of the Corker plan would ensure that is nailed down 
up front.
  Third, the legislation would require that changes in payments to the 
UAW VEBA accounts occur to help the companies' cash flow, specifically 
that at least half of any scheduled payments be made in stock. There 
again, it would reinforce the sense that the workers and the union have 
a real stake in all of this working and in those companies surviving.
  Fourth, any compensation, outside of customary severance pay, that 
goes now to workers who have been fired or laid off or furloughed would 
end. Again, a major cost to these U.S. companies, a major source of 
their uncompetitiveness is they are paying lots of money, tens of 
millions or billions of dollars for people not to work, for people not 
to work.
  That is a plan I could support. That is not putting the cart before 
the horse. That is getting things in the right order, nailing down that 
essential restructuring now before any taxpayer dollars go out the 
door.
  A second alternative I could support would involve a formal 
bankruptcy process. A lot of folks make the argument that bankruptcy is 
not an option, that consumers will never buy a car of a company in 
bankruptcy; they don't know if the warranty will be there or be good 6 
months or a year from now. We can fix that problem. We can address that 
problem with appropriate limited Government assistance and 
participation in the formal bankruptcy.
  Specifically, I would support a plan whereby the Government could 
play that role in two limited, specific ways: one, backing up the 
warranty obligations of the companies with the full faith and credit of 
the U.S. Government so consumers can retain that confidence and, two, 
providing debtor-in-possession financing if that is necessary. I 
believe the Government playing that crucial role, or something akin to 
that, can make a traditional bankruptcy process work.
  Again, Mr. President, I stand before you and my colleagues in the 
Senate--indeed, all the American people--to urge us to adopt one of 
those alternative paths, to urge us to think outside the tiny 
constricted box folks have tried to put us into and find a third way, a 
better way which does exist. There are folks who argue it is this or 
bust. Quite frankly, that is baseless fear mongering. There is another 
way. There is a third path and a better way. I have outlined two just 
in the last few minutes. Let's choose that better path. Let's do the 
responsible thing. Let's demand the fundamental core restructuring it 
will take for these companies to survive. And let's demand it and nail 
it down now, not throw billions of taxpayers' dollars at them simply 
upon the request that they sit down to begin to think about such 
restructuring. That is the plan before us. That is unreasonable. That 
is not an appropriate role for the taxpayers. But these two 
alternatives I outlined would be far different, would demand and ensure 
that core fundamental restructuring happens.
  Mr. President, I urge all of my colleagues, Democrats and 
Republicans, to join me in voting no on the important vote tomorrow 
morning on the present plan and to say yes to real restructuring, 
fundamental core restructuring that can save a maximum number of these 
jobs in America.
  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. McCONNELL. 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. McCONNELL. Mr. President, these are, indeed, turbulent times for 
the U.S. economy. Over the past several months, Americans have seen 
giant companies fail, significant job losses, and, after unprecedented 
problems in the credit markets, the frightening prospect of total 
disarray within our Nation's mainstream economy.
  The crisis in the credit markets came at us quickly. We were told 
that urgent Government action was needed in order to shore up the 
broader economy and that failure to act would lead to a complete 
collapse of consumer credit, the

[[Page 24720]]

very lifeblood of our Nation's economy. Under ordinary circumstances, I 
would have opposed such a measure. Government intervention in the 
marketplace, frankly, cuts against all my ordinary impulses. But this 
was not an ordinary event. I and many others believed that 
extraordinary action was needed to protect millions of ordinary 
Americans from the colossal and far-reaching mistakes of a few. And 
action was taken. The systemic breakdown some envisioned has not 
occurred. So there is reason to believe the medicine has had some 
effect. But on the whole, the overall economy continues to struggle. 
Some industries have been hit harder than others, and one of them 
certainly is the auto industry.
  The problems in the auto industry have been long in the making. But 
last month the situation grew so dire that American automobile makers 
came to Washington with an urgent appeal for Federal help. Over the 
past few weeks, lawmakers have taken the time to examine the problems 
of these companies and the solutions that have been proposed. Now the 
American taxpayers are being asked to put their money behind a plan 
that is aimed at helping these companies survive.
  Republicans received that plan late yesterday morning, about this 
time yesterday. We reviewed it closely to see if it meets the criteria 
I have laid out repeatedly for taxpayer protections and for an 
effective strategy for securing the long-term viability of these 
companies. In the end, I concluded that it does not.
  In some ways, the proposal that was worked out by the White House and 
congressional Democrats appears tough. It calls on struggling auto 
companies and auto workers to make the sort of sacrifices they have not 
been accustomed to making in the past. It also includes time limits as 
a way of hastening necessary reforms. But in reality, this proposal is 
not nearly tough enough. A primary weakness relates to the so-called 
car czar who has nearly unlimited power to allocate taxpayer dollars 
but limited ability to force the kinds of tough concessions long-term 
viability would require. Another problem lies outside the proposal 
itself, and here I am referring to the type of Government action that 
is being contemplated.
  Somewhat lost in the recent debate over the auto industry is the 
fundamental difference between it and the financial rescue plan 
Congress approved in October. While that plan was intended to rescue 
the entire economy, this one is intended to save a single industry. 
That plan was intended to help everyone from small business owners to 
college students, and every lawmaker who voted for it acted in the 
belief that is exactly what it would do. A failure to appreciate this 
distinction has caused a number of other industries and even a number 
of municipalities across the country to prepare their own proposals for 
Government rescue, as all Americans weather the tough economy. It has 
also created the impression in some minds that the Federal Government 
is picking favorites and that favorite businesses get help while others 
do not. A lot of struggling Americans are asking where their bailout 
is. They wonder why one business would get support over another. When 
it comes to the auto industry, many Republicans in Congress have asked 
these same questions.
  There are many principled reasons to oppose this bill. But the 
simplest one is also the best--a government big enough to give us 
everything we want is a government big enough to take everything we 
have. This is as true for individuals as it is for business. It is the 
primary principle upon which American industry, including the auto 
industry, was built. Even in turbulent moments such as this--perhaps 
especially at moments such as this--it is a principle worth defending.
  Now, some argue the effects of the auto industry collapse would be 
too acute and far-reaching for an already struggling economy to bear. 
This is impossible to know. Even if we grant that these companies would 
fail without taxpayer help, we would still have to ask ourselves 
whether the proposal before us achieves the goal everyone claims to 
embrace; namely, the long-term viability of ailing car companies. In my 
view, it does not.
  I have already enumerated some of the weaknesses in the plan. But in 
the end, its greatest single flaw is it promises taxpayer money today 
for reforms that may or may not come tomorrow. We would not be serving 
the American taxpayer well if we spent their hard-earned money without 
knowing with certainty that their investment would result in stronger, 
leaner automobile companies that would not need additional taxpayer 
help a few months or weeks down the road. We simply cannot ask the 
American taxpayer to subsidize failure.
  Now, all Americans, including myself, are worried about the future of 
our Nation's automakers. These companies have a venerable place in the 
story of modern America. They continue to provide hundreds of thousands 
of jobs across the country, including 50,000 auto-related jobs in my 
home State of Kentucky. But many Americans are also worried about the 
prospect of the Government intervening on behalf of some industries and 
not intervening on behalf of others, especially when there is no 
guarantee--no guarantee--that the interventions will work. They wonder 
when the spending stops. If I were to vote in favor of this bill, I 
would not have a very good answer for them.
  The best route for the long-term viability of ailing car companies 
may be a rocky one. Government help is not the only option. It is not 
even the best option. Long-term viability is still possible, but it is 
only possible if these companies are forced to make the tough choices 
necessary for their survival.
  My colleague, Senator Corker, has proposed an amendment that would go 
a long way toward improving this bill. In keeping with the principles I 
have outlined before in these comments this morning, the Corker 
amendment does not just encourage reform--it doesn't just encourage 
reform--it requires reform. It does so with crucial specificity. First, 
participating companies would be required to reduce their outstanding 
debt by at least two-thirds through an equity swap with bondholders. 
The Corker amendment also requires that labor cost at participating 
companies be brought on par with companies such as Nissan, Toyota--
which I also have in my State--and Honda, not tomorrow but immediately 
because it is delusional to think a company which spends $71 per labor 
hour could compete with a company in the same industry that spends $49 
per labor hour.
  The Corker amendment would improve the liquidity and cash flow of 
automakers by requiring that a portion of the payments made to the 
union accounts consist of company stock. Finally, the Corker amendment 
would require participating companies to file for chapter 11 
reorganization if any of these conditions--if any of these conditions--
aren't met by a fixed date.
  The Corker amendment forces necessary reforms, holds companies 
accountable, and assures taxpayers that these companies will not be 
back for more. If legislative action were necessary, the Corker 
proposal would make many much needed and dramatic improvements to the 
underlying bill.
  I, similar to all my colleagues, want the U.S. auto industry not only 
to survive but to thrive. By cutting costs, streamlining production, 
increasing fuel efficiency, and investing in new technologies and 
attractive, more competitive designs, American auto companies will once 
again make cars people all over the world will want to buy. Then, 
Americans would be able to say, again, with pride that our cars are the 
best.
  In addition, protecting the taxpayer is a goal Republicans have been 
fighting hard for in this debate, and in my view it is a goal that is 
well worth our efforts.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from California is recognized.
  Mrs. BOXER. Mr. President, what is the order?
  The PRESIDING OFFICER. We are in morning business, with a 10-minute 
time limit. There is no unanimous consent request on the order of 
speakers.

[[Page 24721]]


  Mrs. BOXER. Mr. President, I ask unanimous consent to speak for 20 
minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mrs. BOXER. Mr. President, I have to say we are now here, approaching 
Christmas, in a deepening recession. On December 1, the National Bureau 
of Economic Research said that, in fact, the recession had begun in 
December 2007.
  How many jobs have been lost in the last year? Almost 2 million jobs 
have been lost in the last year. So we are here today on the heels of a 
loss of 2 million jobs. The unemployment rate stands at 6.7 percent, 
and it is growing. In my State, it is 8.2 percent. Today, the Labor 
Department reported that initial applications for jobless benefits rose 
to 573,000, the highest number in 26 years.
  So when I hear someone come to the floor and say: Gee, I didn't get 
all the language until a couple days ago and this is a problem; you 
know, sit down and read the language. We cannot afford to say we are 
not going to do something and act to turn around this recession because 
somebody didn't have the time to read the bill.
  Consumer confidence has plunged to its lowest level since the survey 
began in 1967. Gross domestic product has dipped, personal spending 
decreased 3.7 percent in the third quarter, and according to the CBO--
the Congressional Budget Office--American workers lost more than $2 
trillion over 15 months as the stock market decline devastated 
retirement accounts. Let me say that again. American workers lost more 
than $2 trillion over 15 months as the stock market decline devastated 
retirement savings accounts. So we are dealing with a crisis.
  Compared to a year ago, U.S. foreclosure filings increased 71 percent 
in the third quarter. The Institute for Supply Management Index, which 
is a key gauge of U.S. manufacturing activity, fell to a 26-year low in 
November. Manufacturing activity fell to a 26-year low in November. 
Home prices, tracked by S&P's 20-city housing index, dropped 17.4 
percent in September. That is a record--the fastest decline on record. 
Do you hear what I am saying? The job losses, the jobless claims, the 
foreclosures, the stock market, everything is going in the wrong 
direction. For people who don't know what the fundamentals of the 
economy mean, that is the fundamentals of the economy. That is the 
fundamentals--unemployment, housing prices, stock market, retirement 
incomes.
  Construction spending fell by 1.2 percent in October, much more than 
what was expected--another fundamental of the economy. Construction of 
single-family homes plunged 4.6 percent from September. Sales at the 
wholesale level plunged by 4.1 percent in October. That is nationwide.
  My State of California trails only Michigan in the total number of 
auto-related jobs. In fact, there are nearly 200,000 Californians 
employed by auto dealers, manufacturers, and wholesalers whose 
livelihoods are at stake.
  At the Vehicle Accessory Center in Rancho Cucamonga, CA, 50 workers 
manufacture auto parts for GM cars.
  The general manager, Russell Hoyt, writes that without a bridge loan 
to the Big Three, ``we run the risk of losing all of the gains we've 
made over the years to make our company more competitive and to build 
new technologies and cars that will benefit consumers and improve our 
nation's energy security.''
  Gina Underwood, the controller of a Saturn dealership that employs 48 
people in Ontario, CA, wrote to me about the impact the credit market 
is having on her business.
  She says ``the potential trickle down into my community borders on 
catastrophic.'' She adds that ``helping our industry in the short-term 
will have a much lower cost than addressing the effects of a failed 
industry in the midst of an economic turnaround.''
  The Los Angeles Federation of Labor says the decline in the auto 
industry is ``responsible for nearly 11 percent of California's job 
loss in the past year. It has also robbed millions of dollars from 
state and local treasuries that are responsible for funding some of our 
most crucial public services.''
  The California chapter of the United Auto Workers writes that ``these 
loans will enable domestic auto companies to continue operations and 
will avoid putting thousands of people out of work.''
  Mr. President, I ask unanimous consent to have printed in the Record 
the California recession figures.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                      California Recession Figures

       In California, the unemployment rate is at 8.2 percent--the 
     highest in 14 years.
       California has lost 101,000 jobs over the past year and 
     487,000 more people were looking for work in October than 
     were doing so a year ago.
       1.5 million Californians are out of work.
       The University of the Pacific Business Forecasting Center 
     has predicted that the state's unemployment rate will peak at 
     9.6 percent the end of next year and won't dip below 9 
     percent until 2011.
       Through the first three quarters of 2008, more than 189,000 
     California homes were lost to foreclosure.
       The number of California homes in foreclosure totaled 
     79,511 in the third quarter--more than triple last year's 
     number.
       In cities like Los Angeles, San Francisco, and San Diego, 
     housing prices have declined more than 25 percent.
       In October 51 percent of homes sold in Southern California 
     were in foreclosures, compared to 16 percent the year before.
       A recent report stated that over 27 percent of California 
     homeowners are already ``underwater,'' or have negative 
     equity in their home.
       The Joint Economic Committee estimates that California 
     state-wide home prices will fall 17 percent between 2007 and 
     2009, resulting in a net loss of over 1 trillion in housing 
     wealth.
       The state budget shortfall for next year could reach $28 
     billion.

  Mrs. BOXER. Suffice it to say that 1.5 million Californians are out 
of work, and in the third quarter we had 79,000 foreclosures, more than 
triple last year's numbers. We have a State budget crisis, some of it 
emanating from this downturn, and we have to step up to the plate and 
do our part. Whether we live in a city, whether we live in a county, 
whether we work for the people as a member of a city council, whether 
we work as a county supervisor, whether we work as a mayor or a House 
Member or a Senator, all of us who work for the people have to step up 
to the plate.
  I did something interesting, and it might be of interest to you. I 
worked with my staff. We have 58 counties in California and we got on 
the phone and we talked to the leaders of each of those counties and 
the 10 major cities in our State. We do have 38 million people in our 
State. They told us what is happening on the ground there, and it is 
not a pretty picture. Now, some of them are doing better than others. A 
lot of them are facing unemployment rates in their cities of 13 
percent, 12 percent, and 9 percent. In the inland empire area, which is 
just east of Los Angeles, we have the highest unemployment rate in the 
Nation, about 9.1 percent.
  So the point of my setting the stage for my remarks by giving a broad 
look at what is happening is to make sure people understand we are not 
taking up this auto rescue plan in normal times. If it was normal 
times, that would be one thing. I wouldn't be that sympathetic to the 
big three in normal times. I have had my arguments with them since the 
1980s. I think their fighting California and the 19 other States that 
want better fuel economy is a huge mistake on their part, and I don't 
want to reward them for that. But I have to tell you, when you look at 
the times we are in, you recognize we need to bridge these troubled 
times right now, bridge these troubled times with a loan so we can take 
a look at this when we have a new President, a new Congress, and, 
frankly, when we begin to see a light at the end of this tunnel, which 
I believe is going to come when our new President comes to us in 
January and we start to put together a plan for economic recovery.
  How tragic would it be if we lost this manufacturing base at this 
point in this recession, just as I do believe we are going to pull 
ourselves out of this mess we are in. We need a bridge to better times 
for the auto industry. By the way, other countries around the globe are 
doing the same for their auto industries. Because there are two

[[Page 24722]]

things happening here. Detroit got in trouble because, in my view, they 
built those big cars, they didn't diversify their fleet, and they 
fought us on fuel economy. Believe me, I was in that fight against them 
every step of the way. They won that fight. But now they are losing at 
the end of the day because they made a mistake in fighting us.
  But we don't want to lose this manufacturing base at this time. We 
would be the only industrialized nation in the world not to have a 
domestic auto industry.
  When I hear my colleagues say I don't like this little sentence here 
or that sentence there, I understand that. Believe me, there are a lot 
of things in these bills I do not like at all. But we have to step back 
and say, in these troubled times, unparalleled since the Great 
Depression, do we want to leave here and risk the chance that we could 
wake up without a manufacturing base in our great Nation? I say the 
answer is no.
  I have three reasons for voting for this rescue package: Jobs, jobs 
and jobs. When we were hit with foreclosures, the first round of them, 
they had to do with predatory lending. They had to do with some things 
that were outrageous--people put in these subprime loans who could have 
been in prime loans. They woke up one day when they were paying $400 a 
month and suddenly it is $1,000 a month. They couldn't do it. We hope 
those loans could be restructured. That is one set of difficult 
circumstances for going into foreclosures. The far worse set of 
circumstances is when you lose your job and your family cannot make it. 
That is the thing I wish to avoid.
  My focus is on this economy and making sure we are doing everything 
to save, preserve, and create jobs. With each passing day, we realize 
what a crisis we are in. Again, today we found out more people filed 
for unemployment compensation, a bigger number than we have seen in 26 
years. When I heard we lost 533,000 jobs last month, it sent shivers up 
and down my spine. If we don't act, we risk seeing another 2 to 3 
million jobs that could be at risk. We know even the collapse of one of 
the big three could cause that.
  In my home State, we have 200,000 auto-related jobs, second only to 
Michigan.
  At the Vehicle Accessory Center at Rancho Cucamonga, our general 
manager there writes that without a bridge loan to the big three:

       We run the risk of losing all the gains we've made over the 
     years to make our company more competitive and to build new 
     technologies and cars that will benefit consumers and improve 
     our nation's energy security.

  Gina Underwood, a controller at Saturn of Ontario, employing 48 
people in Ontario, CA, wrote to me about the impact of the credit 
crisis. She says:

       The potential trickle down into my community borders on 
     catastrophic.

  She adds:

       Helping our industry in the short-term will have a much 
     lower cost than addressing the effects of a failed industry 
     in the midst of an economic turnaround.

  The Los Angeles County Federation of Labor says the decline in the 
auto industry:

       . . . is responsible for nearly 11 percent of California's 
     job loss in the past year.

  The California chapter of the United Auto Workers writes:

       These loans will enable domestic auto companies to continue 
     operations and will avoid putting thousands of people out of 
     work.

  I ask unanimous consent to have these letters printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                     Vehicle Accessory Center,

                          Rancho Cucamonga, CA, November 12, 2008.
     Senator Barbara Boxer.
       Dear Senator Boxer: I own a company that exclusively 
     provides goods and services to General Motors Dealerships in 
     Southern California. I am writing to urge you to support GM 
     and America's domestic auto industry. Our company employs up 
     to 50 people and there are millions more Americans among 
     suppliers, dealers, retirees and communities that depend on 
     our industry for their livelihood and well-being.
       All of us need your support now. We cannot sustain our 
     industry because of the worst financial crisis to hit our 
     country in over half a century. We run the risk of losing all 
     of the gains we've made over the years to make our company 
     more competitive and to build new technologies and cars that 
     will benefit consumers and improve our nation's energy 
     security.
       Our industry is the real economy that runs through Main 
     Street. I call on you and your Congressional colleagues to 
     help preserve jobs and help the domestic auto industry 
     weather this financial storm. With your support, I know my 
     company will emerge stronger and more competitive. And, that 
     means a stronger economy and a more competitive America.
       I have attached an industry fact sheet that really 
     demonstrates the critical nature of this industry to our 
     economy. I look forward to seeing you take an active role in 
     passing legislation to support this critical economic need.
           Sincerely,
                                                  Russell R. Hoyt,
     General Manager/Partner.
                                  ____



                                            Saturn of Ontario,

                                    Ontario, CA, December 2, 2008.
     Hon. Barbara Boxer,
     Washington, DC.
       Dear Senator Boxer: My name is Gina M Underwood and I am 
     the Controller at Saturn of Ontario. My dealership employs 48 
     with an annual payroll of $1,986,059. Our business also 
     supports dozens of local suppliers that are intertwined in 
     our community providing multiple more jobs. I am writing 
     because I fear much of this will be lost and the impact to my 
     community severe if the domestic auto industry is allowed to 
     fail under the weight of the current economic chaos. I 
     believe I have good reason to request your support.
       The negative effects of the global credit crisis have 
     caused a huge downturn in consumer confidence that I see play 
     out on my car lot every day. I have seen my sales plummet to 
     levels not seen since World War II. The manufacturers who 
     supply me can't get credit to complete their restructurings 
     and put advanced technologies into production, my customers 
     can't get credit to buy the new cars off my lot and I can't 
     get credit to finance my monthly inventory. The potential 
     trickle down into my community borders on catastrophic.
       Hundreds of jobs in my community will be lost.
       Multiple suppliers will go under.
       On a broader scale, billions of dollars already invested in 
     asserting U.S. technological leadership for advanced 
     propulsion systems--in batteries, fuel cells, hybrids and 
     biofuels--will be lost.
       Our manufacturing ability, critical for our national 
     security is threatened which only exacerbates our dependence 
     on foreign oil.
       The critics say that the industry has not done enough to 
     save itself. They could not be more wrong. The auto 
     manufacturers have been investing $10 billion in plants and 
     equipment each year. The quality gap has been all but erased 
     between U.S.-based and foreign manufacturers. And new labor 
     agreements that will put the domestic industry in line with 
     our foreign competitors will take effect in 2010.
       I cannot urge you strongly enough to take action on behalf 
     of my community and my industry. Helping our industry in the 
     short-term will have a much lower cost than addressing the 
     effects of a failed industry in the midst of an economic 
     turnaround. Sadly, I fear the price of inaction is greater 
     than my business can bear. Thank you for your time to hear my 
     concerns.
       Sincerely,
     Gina Underwood.
                                  ____

                                                Los Angeles County


                                 Federation of Labor, AFL-CIO,

                                Los Angeles, CA, December 5, 2008.
     Senator Barbara Boxer,
     Los Angeles, CA.
       Hon. Barbara Boxer: I write to you out of concern for the 
     millions of autoworkers who will lose their good jobs if 
     federal emergency aid isn't passed for automakers and because 
     the industry's downfall is responsible for nearly 11 percent 
     of California's job loss in the past year. It has also robbed 
     tens of millions of dollars from state and local treasuries 
     that are responsible for funding some of our most crucial 
     public services.
       While we in Los Angeles are fortunate not to be home to an 
     industry that is on a verge of collapse, we are the nation's 
     capitol of the working poor. In my many years leading the 
     union representing hotel workers, I have come to witness how 
     low-wage workers struggle just to get by. They struggle to 
     feed their children, pay their bills and rent. When their 
     children fall ill they rely on home remedies instead of 
     taking them to the doctor because they simply can't afford 
     it.
       My concern for workers if the emergency assistance fails to 
     pass is not whether they will find another job elsewhere, but 
     what will become of them in that next job. I worry that it 
     will force them into our nation's ranks of the working poor. 
     In my 30 years in the labor movement I've come to learn that 
     poverty in our communities doesn't stem from a lack of jobs. 
     It stems from a lack of good jobs that provide middle class 
     wages and benefits--jobs that provide the pathway to reach 
     the American dream.

[[Page 24723]]

       As leaders, you as a public servant and I as a labor 
     leader, have a moral responsibility to fight for good jobs 
     that allow men and women to raise their families with pride, 
     dignity and with the piece of mind that a secure retirement 
     brings. We must do everything possible to ensure that the 
     industry that was once the backbone of our middle class rises 
     to those heights once again, So I urge you today to vote for 
     government aid to automakers.
           In solidarity,
                                               Maria Elena Durazo,
     Executive Secretary-Treasurer.
                                  ____



                                                 UAW Region 5,

                                    Fremont, CA, December 1, 2008.
     Re Bridge Loan for the Big Three.

     Hon. Barbara Boxer,
     San Francisco, CA.
       Dear Senator Boxer: On behalf of the UAW postdoctoral 
     research members who reside in San Francisco, we would 
     greatly appreciate it if you would take some time away from 
     your busy schedule to meet with us before December 8, 2008, 
     here in the City.
       The purpose of our meeting is to help you understand the 
     serious issues that the UAW is facing concerning the Big 
     Three auto loans. These loans will enable domestic auto 
     companies to continue operations and will avoid putting 
     thousands of people out of work. We also need to remember 
     that suppliers who make certain parts for auto companies will 
     be affected by this as well. Let's not forget that the auto 
     industry has been woven into the fabric of the United States 
     of America, and without it, we will fail.
       This is an extremely important issue to all of us. Please 
     would you contact my secretary, Veronica Morgan, at (510) 
     656-9901, and let her know the date and time you will be 
     available. You can also contact me on my cell, (510) 299-
     7399.
           Sincerely,
                                                      Pat Caccamo,
                                 UAW CAP Representative, Region 5.

  Mrs. BOXER. Mr. President, the unemployment rate in my State, again, 
is 8.2 percent in California; 8.2 percent. It is rising. Losing another 
200,000 jobs at this time is catastrophic. If we leave and we risk 
that, then it is our fault. The people who vote this way will have to 
answer to their own consciences. Failure to act is not an option.
  Here's the thing, there is a huge cost of inaction. I understand my 
colleagues are very concerned about the cost to taxpayers. I share that 
concern. I never heard them talk about that when their States were 
giving all kinds of incentives to foreign car companies to come in. I 
will get to that later. But here is what happens in addition to the 
massive job losses if the big three fail. The burden on taxpayers to 
pick up the pieces would be much more costly than these loans. Losing 
GM, Ford or Chrysler would add billions of dollars in costs to the 
already depleted Pension Benefit Guaranty Corporation. Taxpayers would 
have to provide health care, unemployment benefits, and other related 
services. Unfunded health care liabilities would be forced into 
Medicare and Medicaid with costs reaching $50 billion. If the 
automakers file for bankruptcy, it could lead to a $108 billion loss to 
the Treasury because of reduced individual income.
  My colleagues say let them go bankrupt, as if it is a magic solution. 
It is not a magic solution because the polls tell us 80 percent of the 
people will not buy a car from a bankrupt automaker because of obvious 
reasons. If you want to keep your car 3, 4, 5 years--I keep mine 9 or 
10 years--you want to make sure you have the parts available to fix 
your car. You want to make sure you have someone who understands the 
car and can service the car.
  This is not similar to a dress company going out of business and 
declaring bankruptcy. That is sad and it is tough but, you know, you 
are not going to worry about it. If you have a dress by someone and the 
company goes out of business, you are not going to be dealing with that 
manufacturer. You are if you buy a car. By providing $14 billion in 
loan authority now with requirements that the money be paid back, we 
are taking steps to protect taxpayers from at least $150 billion in 
future liabilities, should the auto companies shut down.
  Then there are people who say isn't this the first of what could be 
many interventions? I can't predict that. I am just saying at this 
time, now, with what we know about the state of this economy, with what 
we know about the state of the lost equity in the market, with what we 
know about the state of housing, of construction, of the number of 
people filing--this the Christmas season. My goodness, let's take a 
chance on this. Let's take a chance on this.
  The administration gave $150 billion to an insurance company. I never 
heard anybody at that time say: Well, the workers in that insurance 
company make too much money. That is the problem. You never heard a 
word about that from my Republican friends. Blaming the workers for 
this is outrageous. They have given back and they have given back and 
they have given back.
  What would happen to the thousands of other associated businesses 
that rely on GM, Ford, and Chrysler if they went belly up? The big 
three share 80 percent of the supplier base in this country. If one of 
the companies goes bankrupt, these small- and medium-size businesses 
could lose significant revenue and be forced to make layoffs or close 
their doors.
  I wish to talk about other countries taking significant steps to 
support their domestic auto manufacturing base. Countries throughout 
Europe and Asia are providing assistance to their auto manufacturers 
during this time of crisis. You take all the auto companies now--take 
Toyota. Their sales are way down. Everybody is hit by this recession. 
The question is, Do we abandon this manufacturing base? Credit markets 
are still frozen. For that, I have to say, and let me be clear--I don't 
understand what Mr. Paulson has done since we gave him that authority 
for $350 billion. Why are the credit markets still as frozen as they 
are?
  The answer comes back: It could have been worse. I believe that. It 
could have been worse. But we need to do a better job there. Let me be 
clear, I am not voting--if I have to vote today, tomorrow, next week--
to release the next $350 billion to this administration. So let me put 
that on the line.
  Other countries are recognizing that, with the credit markets frozen, 
they need to maintain their strong manufacturing base. We are the 
greatest country in the world. How could we ever continue our 
leadership if we lose that manufacturing base? I know Senator Stabenow 
has been quite eloquent on the point, about how integrated the 
manufacturing base is with our military and national defense 
infrastructure. The big three automakers are the biggest customers for 
many of the major suppliers of parts and technology for the armed 
services. From onboard computer devices to tires to engine machinery, 
these suppliers often rely on the big three to sustain their 
businesses.
  I say to my colleagues on the other side who are taking the lead 
against this: Think about it. We all stand for a strong defense. If you 
lose this manufacturing base, whom are you going to rely on if we have 
more national emergencies, international emergencies? We know we cannot 
afford to lose this base.
  I mentioned before that some of my colleagues on the other side--the 
Senator from Alabama, the Senator from Tennessee--they have been very 
outspoken against helping the auto companies. Where were they when 
Alabama provided $258 million in taxpayer-funded incentives to the 
foreign automaker Mercedes-Benz to build an auto manufacturing plant in 
the State of Alabama? I never heard them speak up. Do they only speak 
out against American workers who work for American companies here? They 
support the foreign companies, not the American companies.
  Tennessee offered at least $200 million in incentives to Toyota to 
build an assembly plant in Chattanooga. Instead, they landed in 
Mississippi. Mississippi provided Toyota $296 million in taxpayer-
funded initiatives. Why don't I hear my colleagues from Tennessee or 
Mississippi out here saying: Oh, that was a mistake. Taxpayers should 
not have been on the hook.
  Something is wrong. Is this about not helping these workers because 
they are tough and they joined a union? Is that it? What is this? It 
doesn't smell right. You can't support giving money to lure foreign 
manufacturers into your State, foreign auto companies into your State, 
and then suddenly turn on folks who are trying to save the domestic 
automobile industry.

[[Page 24724]]

  It is not that I am against what those States did. I am just talking 
about being consistent. If you didn't oppose giving money to foreign 
car companies, why do you oppose giving a bridge loan to our own 
domestic manufacturing base at a time of great economic peril?
  We will live to fight another day on this, that is for sure. As I 
said, if this were a different time, if this were a different place, if 
the economy were thriving and one of those companies had problems due 
to their own ineptitude, I would not be here now. This is a worldwide 
recession. Other countries are moving forward. I hope the American 
people understand this.
  If we are to add 2 to 3 million more unemployed people onto the list, 
we are going to be in a downward spiral. It is going to be very hard 
for us to recover in the near term.
  Again, the big three have made a lot of mistakes. I met with them in 
the 1980s. I will never forget it. I was over in the House and I was on 
a committee that was dealing with fuel economy. I said: Why don't you 
make more of these fuel-efficient cars? At that time, I said: My kids 
are in college. I see their friends are all buying these smaller cars. 
They want to buy American, but they cannot. They cannot afford the gas. 
That was after we had this crisis in the 1970s.
  They said: You don't know what you are talking about. Those small 
cars, you don't make enough money on them, they are no good. People 
want big cars. That is good. We make more money. They said to me: We 
are giving up those small cars to other companies, to foreign 
companies.
  I believed that was wrong. I said you need to have diversity.
  They decided to go their way.
  I don't have a great deal of sympathy for the management over there 
responsible for this. They didn't take the lead in research and 
development of advanced technology vehicles. They put too many of their 
resources into gas guzzlers.
  Mr. President, I ask unanimous consent for another 10 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mrs. BOXER. They ignored signs that their future success would depend 
on an ability to adapt to a changing business climate with innovation 
and new technologies. When I learned of the financial problems facing 
GM, Ford, and Chrysler, I viewed a possible rescue plan as an 
opportunity to help Detroit embrace new technologies that could lead 
them toward a strong and prosperous future. I still think, because of 
the White House's objection, the bill before us is making a big mistake 
because I wanted to make sure we could say in this bridge loan the 
funds could not be used to pursue litigation related to the California 
waiver.
  Well, the administration will not go for that. We know where they 
stand on energy independence, we know where they stand on fighting 
global warming, on clean cars. They stand nowhere--or I should say they 
stand somewhere in a bad place. If the big three would embrace the 
California waiver, understanding that 19 other States are with us, and 
produce cars to meet the goals, the very clean-air goals we have there, 
I think we would be a leader in the world. I see that in our future. I 
really do.
  I know in your State, Mr. President, we are seeing a whole new range 
of manufacturing dealing with solar panels. It is very exciting. This 
is the future. This is the future. Our big three should be leading the 
way. I hope they got the message in this last runup of gas prices. I 
hope they get the message that there is global warming and that we are 
going to have to deal with it if our planet is to survive.
  I am confident that President-elect Obama is going to approve the 
waiver. I am confident that when he does that, it is going to be a big 
help to the big three because they will really buckle down.
  By the way, we are going to reimburse this technology fund, they are 
going to move ahead and they are going to meet the requirements with 
the cleanest cars possible, and it will be a new day. Now, if all three 
of them do it and two of them survive in the future, that may be the 
way. We do not know. But what we do know is that today, this day, 
December 11, so close to Christmas, we do know that to walk away 
without helping this important industry could lead--could lead--to a 
far deeper recession and even toward a depression.
  With this auto retooling program from which these funds are being 
borrowed, this will be replenished. Speaker Pelosi has indicated to me 
personally that they will be replenished. I call on my colleagues in 
the Senate to support quick replenishment of the program, which is 
essential to the effort of repositioning the U.S. at the forefront of 
new transportation and advanced battery technologies.
  You know, we have startup companies in my State--very exciting. One 
of them is called Tesla Motors and the other is Fisker Automotive. That 
is two of them. They are leading the effort to develop advanced 
technology batteries, zero-emission cars, and high-performance plug-in 
hybrid electric vehicles. I have driven some of these cars. They are 
extraordinary. These companies and others, including the big three, are 
processing section 136 loan applications to retool manufacturing plants 
and speed up the development of technology that will put the United 
States right out in front, leading the way to clean cars and clean 
technology.
  I wish to point out that no bill is perfect. I could write a bill 
that would be far better for me. Every Senator could. But there is 
significant taxpayer oversight in this bill, as well as benchmarks that 
the big three must meet in order to continue to receive Government 
assistance.
  By January 1, the car czar will develop benchmarks to determine how 
to assess each company's progress in turning its plans submitted to 
Congress into long-term restructuring plans. The benchmarks will focus 
on how the big three will restructure their businesses for long-term 
viability, increased fuel efficiency, advanced technology, managing 
debt, capitalization, and future cost requirements.
  So to my colleagues on the other side of the aisle who say: Let them 
go bankrupt, it is better, they will restructure, we are going to make 
sure they restructure without declaring bankruptcy and without 
unloading all of the cost of that bankruptcy onto the backs of 
taxpayers. If any of the big three fail to submit long-term 
restructuring plans by March 31, 2009, the car czar has the authority 
to call the loan or cancel the loan commitment within 30 days, 
requiring the loan to be paid back at an accelerated rate.
  Taxpayers will recover the cost of these loans over 7 years at a rate 
of 5 percent for the first 5 and 9 percent thereafter. The car czar 
will have access to all financial records of the big three and will 
have the ability to prohibit asset sales or possible investments over 
$100 million, which will protect U.S. jobs being outsourced. The 
Government will have senior debt status for repayment of the loans, 
meaning we are in the front of the line to recover loan payments 
regardless of the companies' success. Stock warrants will ensure the 
taxpayers benefit from any future growth these companies may 
experience. The bill prohibits golden parachutes, puts limits on 
executive compensation and bonus compensation to top employees, and it 
requires the companies to divest from any private jet investments. The 
payment of dividends to shareholders will be prohibited during the loan 
period. In other words, there is every incentive for these companies to 
turn their companies around. They want to pay dividends to 
shareholders, they want to get bonuses, they want to get back to 
business as usual. But we say: Before you do, you have to pay us back. 
They have a lot of reasons to make this turnaround.
  The loan program will be subject to strict auditing by the 
Comptroller General and the GAO. The car czar will be tasked with 
facilitating agreements between unions, retirees, debtholders, 
creditors, suppliers, auto dealers, and shareholders to reduce costs 
and ensure long-term viability.
  Again, I say to my colleagues who are saying let them go bankrupt, 
take a look at this bill. You are saying let

[[Page 24725]]

them go bankrupt because they will have to restructure. We say 
restructure without the bankruptcy because if, in fact, there is a 
bankruptcy declared, 80 percent of the American people say they will 
not buy a car from a company that has gone bankrupt. I understood that. 
So this avoids the bankruptcy and allows them to restructure. If we 
fail to do this, we are playing Russian roulette with this recession. 
In times of crisis, you have to see opportunities.
  I believe, as a major critic of the car companies since the 1980s 
when I was here in the House of Representatives, they have finally 
gotten the message. It has taken them too long. They have been too 
arrogant. They have not seen the world changing. They have not noticed 
global warming. They have been blinded to so many things that were 
happening around them. They were hostile to California and the 19 other 
States that want to clean up our environment and get better fuel 
mileage, have clean cars. Instead of embracing those States and working 
with those States--by the way, those 19 States and California represent 
a majority of the American people. A majority of the American people 
want clean cars.
  Now, it may have taken this horrific turn of events to get the 
message through, but clearly the message must be getting through. 
Jeffrey Sachs wrote recently in the Washington Post:

       American-made fuel-cell cars may be a large-scale reality 
     within a decade. Success would dramatically improve energy 
     and national security and U.S. global competitiveness.

  Now, this is the opportunity. But guess what. If we do not act, if we 
do not act and this recession keeps deepening, we will not have this 
chance. We will be the only industrialized democracy without a domestic 
auto company and without that manufacturing base. So we have to do what 
is necessary to push Detroit toward a stronger, more efficient future. 
It may be that at some point in the future, that industry will have a 
different look to it. Maybe it will have a different look to it. We do 
not know that. But what we do know now is that what has hit Detroit is 
far more than making the wrong choices about what cars they produce. I 
think they made those wrong choices, but it is far bigger than that 
because every company in America and outside of America that is making 
cars is suffering today because of the terrible recession we are in, 
because of a lack of consumer confidence, because of a loss of equity 
in the stock market, because of home foreclosures, because of all of 
these things.
  So I say you never know what could happen in the future. I am not 
able to predict it because I cannot. But I know what I have to do now. 
I have to think about those three things: jobs, jobs, and jobs. When I 
think about that, and I recognize that just today we had more filings 
for unemployment insurance than we have had in 26 years, I say for us 
to walk away from this without this scaled-down bridge loan would be 
playing Russian roulette with this recession. I love my country too 
much to do that. With all of the problems I have with Detroit, I will 
support helping them in this fashion.

                          ____________________