[Congressional Record (Bound Edition), Volume 154 (2008), Part 18]
[Senate]
[Pages 24729-24733]
[From the U.S. Government Publishing Office, www.gpo.gov]




                      DOMESTIC AUTOMOBILE INDUSTRY

  Mr. LEVIN. Madam President, the bill that has been filed by the 
chairman of the Banking Committee would do for the U.S. domestic auto 
industry what governments around the world are doing: providing 
emergency assistance to their auto industries because their survival is 
jeopardized by a worldwide recession which has resulted in plunging 
auto sales.
  That global recession is not the making of the auto industries around 
the world, including our own domestic industry. Past mistakes of the 
big three are not the cause of the worldwide recession and resulting 
credit freeze. People who want to make large purchases, such as 
automobiles, are unable to get credit, and 90 percent of the people who 
buy automobiles buy on credit. Many people simply are afraid to make 
large-scale financial commitments in these scary economic times. So the 
U.S. domestic auto industry is not alone in needing loans to make it 
through the global economic calamity we are in. Look at the rest of the 
auto-producing world. Here are some headlines in the news recently:
  ``Facing a Slowdown, China's Auto Industry Presses for a Bailout From 
Beijing.''
  Brazil. ``In Brazil, Whiplash on Assembly Lines.'' ``The Government 
stepped in with a $3.5 billion aid package for the auto industry by 
funding banks to boost the amount of credit available for car loans.''
  ``European Carmakers Get $50 Billion in Aid.''
  ``European governments poised to help their automakers.''
  ``Automakers in other nations get more government help. Requests for 
aid made worldwide''--another headline.
  These are all headlines in papers across the country.
  Reuters, ``Spain to support car industry.''
  ``France's stimulus plan includes carmakers.''
  ``Portugal rolls out loan.''
  ``Auto industry faces massive job losses without aid,'' according to 
the chairman of one of the largest automobile industries--not one of 
the big three.
  Now, why are nations around the world stepping in to support their 
auto industries? It is because of the drastic decline in sales across 
the industries around the world--not just domestic, not just the big 
three--leaving no alternative to every other auto-producing country and 
its government but to support its industry. Hyundai sales are down 40 
percent; Toyota sales are down 34 percent; Honda, down 32 percent; 
Nissan, down 42 percent; Mercedes, down 38 percent. These are not the 
big three. These are automobile makers around the country that are in 
the same situation as the big three. But the difference, so far, is 
that other governments are stepping in. We have not yet stepped in to 
support our industry.
  In arguing against these loans for the big three, some continue to 
describe the domestic companies of the 1970s and 1980s when fuel 
efficiency was not high on the list of the big three as big three goals 
or achievements. Some would have us ignore dramatic gains in quality 
and vastly greater numbers of fuel-efficient vehicles now being offered 
by the big three. In the area of quality, big three autos are equal to 
or better than their foreign competitors. For example, the J.D. Power 
Initial Quality Study scores the overall quality of Buick, Cadillac, 
Chevrolet, Ford, Mercury, Pontiac, and Lincoln--these are objective, 
outside studies on quality for those American brands, Buick, Cadillac, 
Chevrolet, Ford, Mercury, Pontiac, and Lincoln--as high or higher than 
Acura, Audi, BMW, Honda, Nissan, VW, and Volvo. J.D. Power rates the 
Chevrolet Malibu as the highest quality midsize sedan on the market, 
and both the Malibu and the Ford Fusion score better than the Honda 
Accord or the Toyota Camry.
  On the fuel efficiency side, here are some facts that hopefully 
colleagues will consider. Long before the credit crisis hit, GM laid 
the groundwork to offer 15 hybrids by 2012. Thanks to investments they 
have already made, GM already has 20 models that achieve 30 miles per 
gallon or better--twice the number of its nearest competitor. All the 
big three are working to ensure that at least 50 percent of their 
American production is capable of running on biofuels by 2012. Domestic 
automakers produce numerous cars that have equal or better fuel 
efficiency than their foreign competitors. And again, the most fuel 
efficient Chevy Malibu gets 33 miles per gallon on the highway, which 
is 2 miles better than the best Honda Accord. The most fuel efficient 
Ford Focus has the same highway fuel efficiency ratings as the most 
fuel efficient Toyota Corolla.
  In the area of productivity, Chrysler tied Toyota as the most 
productive automaker in North America this year, according to the 
Harbor Report on Manufacturing, which measures the amount of work done 
per employee. Eight of the ten most productive vehicle assembly plants 
in North America belong to Chrysler, Ford, or General Motors.
  Now, there are also some who want to ignore the reduction in benefits 
that have been taken already by UAW workers and retirees. In the 
collective bargaining agreements negotiated in 2005 and 2007, the UAW, 
along with GM, Ford, and Chrysler, achieved billions of dollars in cost 
savings and set the companies on the course to bring labor costs, 
including benefits, in line with

[[Page 24730]]

their foreign competitors in the United States by 2012. Wages were cut 
and pension and health care benefits were greatly reduced as well.
  The UAW is taking responsibility for managing its own retiree health 
care benefits beginning in 2010 by setting up its own voluntary 
employee beneficiary association, or VEBA. The VEBA plan will transfer 
responsibilities for health care benefits for existing employees from 
companies to an independent trust. This eliminates half of the 
companies' liabilities for retirees' health care, with billions of 
dollars of savings.
  The memory of mistakes made decades ago lingers and remains the 
impression that many have of the big three despite all the facts I have 
just outlined. Beliefs are always hard to change. So the facts I have 
just shared about improved quality and more fuel efficient vehicles and 
alternative-energy vehicles being produced by the big three may not be 
readily accepted by people who have beliefs that are to the contrary. 
But one fact is indisputable and will hopefully influence some who are 
open to argument: Auto industries around the world are seeking the 
support of their governments through loans and other methods and are 
getting it. I went through that series of headlines, from Brazil to 
Europe, all the way to China. The Chinese automobile industry is asking 
for loans from the Chinese Government. No other auto-producing country 
that I know of in the world is failing to act to make sure its industry 
is alive when the deep global recession is over, and we shouldn't 
either.
  There is also a national security aspect to the American auto 
industry, and I wish to spend some time on this because there was 
testimony that was prepared for delivery to the Banking Committee when 
they met on this subject by the Director of the U.S. Army Tank 
Automotive Research, Development and Engineering Center, called TARDEC. 
So this is the Army R&D and engineering center. It is located in Macomb 
County, MI. TARDEC develops, integrates, and sustains the right 
technology solutions for all of our manned and unmanned Department of 
Defense ground vehicle systems and combat support systems in order to 
improve force effectiveness and provide superior capabilities for the 
future forces of this country.
  The Director of TARDEC is Grace Bochenek. Because of the security 
importance of what I am going to relate, I am going to read from her 
prepared testimony, and this is going to take some time. I am going to 
read from her prepared testimony, though it wasn't actually delivered. 
It ended up that they had too many witnesses, and so she wasn't 
invited, but this testimony is a compelling story of the continuing 
relationship between the big three, the domestic auto industry, and our 
U.S. Army vehicle program.
  We all look back--some of us nostalgically--to what Detroit did 
during World War II. That is the past. There is a present which is 
critically important in terms of the security of this country. Some 
have pointed out the need to have a manufacturing base in order to 
quickly expand in the case of need, and that is a powerful argument--a 
national security argument for keeping our big three auto industry 
around the way other countries keep their auto industries around. Some 
other colleagues have pointed out in some detail the relationship 
between the suppliers of the big three and the suppliers of vehicles 
for the Army and how much trouble those suppliers would be in--these 
are Army vehicle suppliers--if the big three did not survive, and that 
is another powerful national security argument. But I am going to focus 
on what Grace Bochenek focused on, the Director of TARDEC, which is the 
relationships, the synergies that exist between the big three now and 
the Army in terms of current products and current technologies which 
are inserted into our vehicles and future technologies which are being 
developed as we speak.
  I am going to quote from her testimony, and this will all be quotes 
except where I insert my own words, which I will try to make clear. But 
this will be a long quote, for those who are listening to this 
testimony and, hopefully, reading it.

       The synergies between TARDEC and the U.S. automotive 
     industry and the collective challenges we face. TARDEC's 
     connection to the automotive industry dates back to 1947, 
     when the Tank Automotive Components Laboratories, now known 
     as TARDEC, was established. The level of cooperation between 
     the Army and the auto industry was strengthened by the 
     Secretary of the Army's charter of the National Automotive 
     Center, NAC, in 1992 to champion the development of dual-use 
     automotive technologies and their application to military 
     ground vehicles. Today, the NAC remains the connective piece 
     and continues to engage through many different mechanisms to 
     leverage the capabilities, skills, and facilities of the 
     automotive industry.

  Referring to the Department of Defense and the domestic automobile 
industry, she continued:

       For the past 70 years, we have shared common research 
     goals, leveraged investments in technology, mutually 
     benefitted from those technical developments, and 
     collectively owned the responsibility for our Nation's next 
     generation of automotive engineers and scientists. 
     Technologies may have changed, but the importance of working 
     together to collectively drive innovation has not. The Army's 
     specific challenges are as follows: First, significantly 
     increasing fuel efficiency to reduce the logistics burden on 
     our troops. In some cases, fuel is 70 percent of the bulk 
     tonnage that we take to war. Second, substantially increasing 
     electric power available on the battlefield and developing 
     the next generation of electronic warfare tools. Third, 
     increasing soldier protection through the development and 
     application of advanced light-weight material solutions. 
     Fourth, utilizing sensor technology throughout our vehicle 
     platforms to collect prognostic data allowing for overall 
     improved reliability and reduced sustainment costs. Fifth, 
     engaging the enemy without putting soldiers in harm's way 
     through the fielding of unmanned systems.

  Another word for that is robotics.
  Continuing now with Grace Bochenek's prepared testimony.

       Often the only difference between military and commercial 
     automotive technologies is a matter of scale both with regard 
     to the market (quantity) and component durability (military 
     specifications). The goals and the technologies leading to 
     their accomplishment, however, remain very similar. Our 
     motivations may differ, but our technological goals are 
     shared ones. Both the Army and the automotive industry seek 
     to achieve technical advances in the areas of power and 
     energy, vehicle intelligence, robotics, safety, advanced 
     lightweight materials and leading-edge manufacturing methods.

  Then she goes into examples in each of those areas, where there is a 
working together, a cooperation, a synergy between the American 
automobile industry and the Army vehicle program. She continues:

       In 1997, TARDEC began a commercially based tactical truck 
     program focused on leveraging GM, Ford and Chrysler's 
     commercial truck platforms to meet some of the military's 
     light tactical vehicle requirements. Chrysler and GM provided 
     hybrid electric vehicles that included start-stop operation 
     and vehicle exportable power providing TARDEC with 
     information critical to defining future requirements.
       A Cooperative Research & Development Agreement (CRADA) 
     between Ford and TARDEC launched the development of a thermal 
     management software modeling tool. This further matured under 
     multiple Small Business Innovation Research (SBIR) contracts 
     utilizing tri-service investment. The dual use software 
     produced has been fully commercialized and is now sold 
     worldwide by one of the SBIR, recipients, resulting in a new 
     Michigan business with revenues of about $10M per year. 
     Ford's initial investment was absolutely critical in the 
     development of this world class product the application of 
     which has also become the Army, Navy, and Air Force standard. 
     This is an example of how an Automotive OEM--TARDEC 
     partnership was able to leverage resources to create jobs and 
     develop useful technologies.
       TARDEC continues to partner with automotive industry OEMs 
     and suppliers on advanced powertrain technologies including 
     fuel cell technologies, power and thermal management, and 
     advanced automotive batteries all of which are necessary for 
     the next generation of military systems. TARDEC leverages 
     fuel cell developments primarily through the automotive 
     supplier base with companies such as Ballard, Delphi, and 
     United Technologies. TARDEC also has a longstanding 
     relationship with General Motors in the demonstration and 
     evaluation of light duty commercial fuel cell vehicles. This 
     program has allowed TARDEC to assess multiple generations of 
     fuel cell technologies.
       Batteries are critical to implementing advanced automotive 
     powertrains. As such, there is a growing body of 
     collaborative work between TARDEC, the automotive OEMs, and 
     their suppliers. The cornerstone of TARDEC's efforts in this 
     area is the development of manufacturing technologies needed 
     to mass-produce high power and energy

[[Page 24731]]

     density Lithium-Ion (Li-Ion) batteries--particularly critical 
     for the Army's Future Combat Systems platforms. Additionally, 
     there are many ongoing military battery technology 
     development efforts that leverage emerging automotive battery 
     technology providers such as Al23, AltairNano, Boston Power, 
     GS Yuasa, Inanovation, EnerDel, EnerSys, Firefly, Kokam 
     America, Quallion, and SAFT America. With the help of the 
     Automotive OEMs and the Department of Energy, TARDEC is 
     escalating efforts to define the boundaries for dual-use 
     commercial and military applications of advanced battery 
     technologies through the U.S. Advanced Battery Consortium. 
     Additionally, General Motors is supporting TARDEC advanced 
     battery requirements through direct, individual collaboration 
     through a CRADA and an additional newly awarded contract.
       TARDEC and the automotive OEMs have both identified 
     advanced automotive batteries as a key area for collaboration 
     going forward. In the support of expanding collaboration in 
     advanced batteries, TARDEC has worked with the automotive 
     OEMs and suppliers of battery technologies to assess the 
     scope of effort around establishing a robust, diverse 
     manufacturing base for advanced automotive batteries. This 
     effort recently culminated in a two-day Battery Summit, which 
     involved over 70 participants from industry and government. 
     Discussions covered the technology, policy and manufacturing 
     implications of having a domestic base for the manufacture of 
     advanced batteries. TARDEC intends to continue to work with 
     key stakeholders to identify near term opportunities in the 
     area.


                          Vehicle Intelligence

       The Army faces high operating and support costs in its 
     aging fleet of vehicles. Currently the Army reduces this 
     heavy cost burden through periodic scheduled inspections and 
     sustainment efforts. To further reduce this cost burden, the 
     Army must move towards an intelligent vehicle architecture.
       Both the Army and the automotive industry have vested 
     interest in enhancing their platforms by providing predictive 
     maintenance enhancements through prognostic capabilities. 
     This requires equipping vehicles with computing devices, 
     sensors, middleware, and wireless infrastructure. Through 
     these enabling technologies, vehicle intelligence is made 
     possible. This could ultimately enhance operational readiness 
     and reduce lifecycle maintenance costs for ground vehicle 
     platforms by reducing the heavy cost burden of periodic 
     scheduled inspections and automating the supply chain to 
     proactively provision for part replacements to optimize the 
     maintenance repair process.
       Vehicle intelligence is also an enabling technology for 
     Condition Based Maintenance and (vehicle) Health Monitoring 
     technologies. It is related to existing developments in the 
     commercial automotive industry such as the installation of 
     electronic control units (ECU) and electronic control modules 
     (ECM), computing devices, and sensors. These devices 
     facilitate diagnostic analysis at the vehicle subsystem 
     level. This in-vehicle network provides the ability to 
     diagnose such components as the powertrain, ABS, and critical 
     safety systems. GM Diagnostics has taken this a step further 
     by enabling cellular transmission of data off platform for 
     off-board analysis and status updates through their OnStar 
     system. The Army is working with commercial automotive 
     partners to develop this technology for military use via 
     secured communication pipelines.

  Robotics--now she addresses robotics in her prepared testimony. I am 
going into this at some length because what has not been focused on 
enough in this debate is the security implication of the failure of the 
big three. There has been a lot of discussion about why it is essential 
that we not allow the big three to go under in terms of this economy. 
But what has not yet been focused on specifically, other than general 
statements about the connection, the current and future connection, is 
the essential synergy between the big three and the Army particularly 
but also the military in general.
  People's minds tend to go back and say that was all World War II, 
that was all the ``arsenal of democracy,'' and yes, it was, and we are 
proud of it. But it is also 2008, 2010, 2015, 2020. What kind of 
equipment our troops will have will depend upon whether we have the 
kind of connection between our military and our commercial worlds. In 
the area of vehicles, to disconnect that connection, to rip it apart, 
to allow the big three to go under, has a massive negative security 
impact on this country and on the well-being and survival of America's 
troops.
  She goes on:


                       robotics, unmanned systems

       The U.S. Army has a long history of working with the 
     automotive industry on the development of enabling 
     technologies for manned and unmanned systems. Unmanned 
     systems are key resources for our fighting men and women in 
     the Global War on Terrorism.
       Many of the key technologies currently used on ground 
     robots have their start in cooperative programs between the 
     U.S. Army and the Big 3 Automotive and their tier suppliers. 
     The Army and the automotive companies have several aligned 
     activities in unmanned systems. For example, the Army has 
     several overriding objectives we are trying to achieve for 
     the development and deployment of future unmanned vehicle 
     systems. Primary among these goals are Safe Operations (Safe 
     Ops) and Total Situational Awareness (SA) around the 
     vehicles, necessary because a robot operates by sensing the 
     environment around it at any given moment. Safe Ops and 360 
     degree SA are also critical for the safe operation of 
     passenger cars on automated highways, which means our goals 
     are aligned perfectly with the programs in the auto industry.
       Recently, both GM and Ford participated in the series of 
     DARPA Autonomous Vehicle Grand Challenges. The 1st Grand 
     Challenge was held at the California Motor Speedway and it 
     tested the ability of vehicles to move autonomously over 
     structured roads. The 2nd Grand Challenge was a 170 mile 
     cross-country road race in the deserts of Nevada. The 3rd and 
     final challenge, called the DARPA Urban Challenge (DUC), was 
     designed to push the state-of-the-art in autonomous 
     navigation in urban environments, where each competitor had 
     to obey the rules of the road and contend with other robots 
     and driven cars. Many of these robust automotive sensing 
     methodologies are being transitioned to Army programs for 
     integration into both manned and unmanned systems.
       In every one of these competitions both Ford and GM 
     partnered with leading universities in the U.S. to put 
     together winning teams that finished in the top 5 percent of 
     race finishers (the GM-Carnegie-Mellon team won the DUC in 
     2007). The close coupling of robotic sensors, actuators and 
     intelligence was enhanced by the collaboration of automotive 
     engineers at the OEMs.

  Then she goes on with her description of safety issues.

       There are multiple overlapping safety goals between the 
     commercial automotive industry and the military ground 
     vehicle fleet. Just as injury risk mitigation and thorough 
     modeling and simulation of technologies is important to the 
     commercial automotive manufacturers; these precautions must 
     be taken to reduce the impact to our Soldiers, Sailors, 
     Airmen, and Marines.
       Automotive industry OEMs and key suppliers have worked with 
     TARDEC in the development of advanced modeling and simulation 
     efforts to characterize occupant impact during rollover and 
     side impact crashes. TARDEC recently developed ground-
     breaking full vehicle underbody blast models and 
     methodologies to both accurately predict occupant injury 
     during an energetic event such as a mine/IED blast, and to 
     develop new countermeasures. This effort would not have been 
     possible without heavy leveraging of automotive tools and 
     methodologies from the automotive crashworthiness area. 
     TARDEC's commercial partners have also been critical in 
     advanced technology product development, testing and 
     validation, design studies, and developmental tests. Finally 
     TARDEC relies on the commercial partners for prototyping and 
     large quantity manufacturing capabilities.

  Advanced lightweight materials is the next subject that she took up 
in her prepared testimony.

       One of TARDEC's mandates is to research, develop, engineer, 
     and to leverage lean, agile, advanced manufacturing 
     technologies used by the U.S. Auto Industry, Academia, and 
     other segments of the U.S. Industrial Base. This is 
     accomplished through partnerships and contracts with 
     manufacturers, suppliers, and universities, taking advantage 
     of manufacturing capabilities developed to service the high 
     volume needs of the auto industry and adapt the technologies 
     for manufacturing the low volume production of military 
     components.
       With the auto industry leading the charge, TARDEC is 
     pursuing several advanced manufacturing processes such as 
     friction stir welding, laser additive and subtractive 
     manufacturing, flexible manufacturing cells using robotics, 
     and water-based environmentally safe painting processes.

  Then she addresses automotive expertise, knowledge, and education.

       To maintain technological superiority now and in the 
     future, we need top quality scientists and automotive 
     engineers in our workforce. Alongside the automotive 
     industry, we have always had a shared commitment and felt the 
     collective responsibility to develop the next generation of 
     engineers, and recognized the challenge to do so.
       TARDEC has long recognized that a scientifically and 
     technologically literate citizenry is our Nation's best hope 
     for a diverse, talented, and productive workforce. To achieve 
     this goal, we have partnered with the automotive industry and 
     universities to develop curriculum that will benefit both 
     TARDEC and the American automotive original equipment 
     manufacturers.

[[Page 24732]]

       We have also been able to address this challenge through 
     our Automotive Research Center, which has created ways for us 
     to partner with universities and allow students the 
     opportunity to develop and work on relevant automotive 
     engineering challenges.
       Over the years, the automotive industry has made 
     significant contributions to the Army through technology 
     exchange processes available in the ARC [which is the 
     Automotive Research Center]. And in recent years, an 
     increased emphasis on research involving high mileage, low 
     polluting vehicles, as well as the new high technology needs 
     for large trucks, off-road vehicles and robots has provided 
     invaluable data and resources for us towards the Army's long 
     term transformation goals and objectives.
       In 2007 and 2008, TARDEC supported 52 ARC research projects 
     spanning Power, Mobility, Survivability, Modeling and 
     Simulation technology areas. Ford, Chrysler and General 
     Motors and at least 12 Tier-1 suppliers provided their 
     resources and expertise towards 36 of the 52 research 
     projects. The remaining projects had industry involvement 
     from Tier-2 and Tier-3 suppliers such as large software 
     companies, industry consultants and automotive small 
     businesses.
       The fact remains [and I will conclude with this] that the 
     need for partnerships and the consistent leveraging of 
     resources is critical for continued innovation, technological 
     breakthroughs. American automotive original equipment 
     manufacturers partnership with TARDEC in events such as [then 
     she lists a whole lot of events] inspires young engineers to 
     consider careers in math and science and helps to develop 
     many needed automotive skill with applicability in DOD's 
     ``real'' workforce environments.
       Automotive industry support has been crucial in developing 
     the educational infrastructure that has allowed the 
     development of an automotive engineering talent base here in 
     the United States. And that talent base will be central to 
     future efforts to create a safer Nation and a robust 
     manufacturing environment.
       At this time, when we have to [these are her last words] at 
     this time, when we have to break the dependency on foreign 
     oil, provide energy security for the Nation, and increase 
     soldier protection, it becomes even more critical, [even more 
     critical] to leverage investments, exchange technical ideas 
     to drive innovation, and provide the breakthroughs that are 
     necessary to maintain the dominance of the American military.

  I very much appreciate the time that I have taken to share with this 
body the statement of the head of the organization in the Army which is 
responsible for the technologies in current vehicles and future 
vehicles.
  I have done this because there is kind of yet the unstated critical 
need for the survival of the big three. The stakes for our economy 
nationally are huge. The failure of the big three would send a tsunami 
through this already battered economy.
  Millions of workers would lose their jobs. Dealers in every town and 
on every Main Street are already reeling from the economy's plunge. 
Automotive component suppliers, who are in fully half our States, are 
on the knife's edge already, waiting for us to act.
  Men and women who work for steel mills and textile factories and 
glass factories and computer chip factories are waiting and hoping.
  The financial industry would be at risk as well. A collapsed auto 
industry would lead to defaults on over $1 billion in corporate bonds, 
credit default swaps and other financial instruments tied to the auto 
industry and could send the stock market into another, deeper tailspin. 
Major additional damage to U.S. financial institution balance sheets 
would result, throwing our credit markets into even deeper turmoil.
  Despite these facts, there are still some who say, ``let them go 
bankrupt, let them go under,'' even though 1 in 10 jobs in this country 
are tied to the auto industry. In addition to hoping that they will ask 
themselves why no other government is allowing that to happen to their 
auto industry, I would also hope they would listen to some experts on 
the subject of bankruptcy for the auto industry.
  A recent report released by J.P. Morgan titled, ``Cost of the 
Alternative,'' described the scenario where one or more of the Big 
Three are left to file for bankruptcy as ``Credit Crisis Part II.'' It 
indicated that unemployment would shoot up by 2 percent if one of the 
Big Three failed, and this failure scenario would require the Pension 
Benefit Guarantee Corporation to take over more than $100 billion in 
obligations that the Big Three currently hold. It noted that Ford and 
GM and their financial arms ``comprise over 10% of the high-yield bond 
market and the auto sector represents one of the largest sectors in 
leverage finance for banks.''
  Another recent report by the Anderson Economic Group and BBK 
calculated the costs in the first year following the failure of two of 
the Big Three. Such a scenario would cost States $12 billion in tax 
revenues; it would cost the Federal Government $40 billion in income 
and Social Security taxes, and it would cost an additional $8 billion 
in unemployment insurance and $5 billion in significantly increased 
costs to the Pension Benefit Guarantee Corporation. The report 
indicates a high risk that inaction by Congress would result in a 
permanent shift of manufacturing jobs out of the United States and a 
dependence on foreign technology.
  Mr. President, these are risks we cannot take. We must pass this 
legislation. Without this legislation, one or more of the Big Three 
will likely collapse in the coming weeks. The U.S. taxpayers would 
provide a bridge loan to avoid this catastrophe under this bill, but 
with important protections for their investment, including stock 
warrants for the Government; limits on excessive executive 
compensation; a prohibition on golden parachutes; and a prohibition on 
payments of dividends until the loans are fully repaid. And the so-
called auto czar has the ultimate power under this legislation to 
enforce compliance with the long-term plans of the auto companies that 
accept these loans: he can call or cancel the loans if he disapproves 
the auto companies' restructuring plans.
  We cannot afford to further destabilize Wall Street, and we cannot 
afford to allow millions of jobs on Main Streets in communities across 
the country to disappear. The domino effect of failure would ripple 
across our entire Nation and add untold suffering to an already dire 
situation.
  I urge my colleagues to support this critical legislation.
  As chairman of the Armed Services Committee, I wanted to focus on an 
aspect of this debate that has not achieved adequate attention. That is 
the tight, important connection between our domestic auto industry and 
the future security of this Nation and our men and women in uniform.
  We have no greater responsibility than that. That factor, that 
synergy, that relationship, that connection, is an essential component 
of this debate.
  I hope when our colleagues look at all of the factors, they will 
consider that important reason for sustaining and supporting an 
automobile industry in this country. Again, no other Nation is allowing 
their automotive industry to go down in this global economic disaster 
we are all in. They have all taken steps to support their industry.
  We should too, for many reasons. But one of those reasons, one of the 
most important reasons we are here in the Senate is to make sure that 
our men and women in uniform always have the best equipment that can be 
produced in the world. They put their lives at risk. They are entitled 
to every advanced technology we can give them.
  Part of the production of those technologies the big three is playing 
today, tomorrow, and hopefully in the future, is a critical role.
  Mr. WARNER. Would the Senator entertain a question?
  Mr. LEVIN. I did not see my dear friend from Virginia come to the 
floor. I wish I had, because I wanted to put those parts of my 
remarks--and they were lengthy, but at a time when he might be hearing 
them either here or in his office.
  Mr. WARNER. Mr. President, we had the opportunity to speak on this 
subject earlier today. And I reminded my good friend of the 
extraordinary chapter in American history that was performed by the 
industrial base in your State and elsewhere across America under the 
leadership and guidance of those companies manufacturing automobiles 
after Pearl Harbor, I mean who were in the business of manufacturing at 
the time of Pearl Harbor. They shut those lines down very quickly and 
turned to full military production. That is a great chapter in American

[[Page 24733]]

history. And, fortunately, I am old enough to remember it quite well as 
a young man.
  But today, it is a different industrial base in the automobile 
industry. Whereas they had a very dominant position in the production 
of vehicles, particularly tanks, and they did some aircraft and so 
forth, that has given way to the high-tech aspects which the Senator 
from Michigan addresses here on the floor for the benefit of our 
colleagues.
  That is a great chapter in American history. I would hope this Nation 
would never again be faced with as serious a problem as it was in World 
War II, namely that we had let our Armed Forces get down to very small 
levels and the equipment was old and tired.
  You remember the pictures that they used broomsticks to practice 
their military maneuvers with and the Model T and Model A automobiles 
that were used for tanks. But that chapter reflects the potential of 
not just the companies themselves but the workers and how quickly they 
took their knowledge and their skilled hands to swing into action and 
produce the war materials that we needed very quickly.
  Today our military is much stronger, well equipped, thanks to the 
distinguished chairman and others who have served with us on that 
committee. I think the likelihood of our Nation ever being confronted 
with a conflict that would have to require that enormous buildup is 
not, hopefully not there, but nevertheless we should remember that 
chapter.
  It documents the capabilities of the workers and the families in this 
industry. I think you pointed with great pride to that era. I might add 
to my colleague's comment, he closed by asking all Senators to consider 
this very carefully. As I finish up my 30 years, I have been to a lot 
of Republican caucuses. We had one yesterday at noon. We just completed 
another. And the gravity of this issue is reflected in the gravity of 
the careful, very careful consideration being given by every member in 
our caucus. I can tell you that without any question. I am not 
suggesting exactly which way they are going to go. But I know that they 
have the best interests of the country in mind, and the gravity of the 
situation is enormous. You can detect it as you hear the colloquies 
going on on our side. I am sure the same is taking place the Senator's.
  Mr. LEVIN. Mr. President, first, I thank my dear friend from 
Virginia. This will probably be, we keep saying, the last opportunity 
we have to speak with each other on the floor of the Senate. It may be, 
it may not be, as it turns out. But I know of no Member of this body 
who has put the interests of this Nation more deeply in his heart than 
the Senator from Virginia.
  There are others who probably share that with him; I know there are, 
but the focus which I gave here today outlining the current 
relationship between the big three and the technologies that are 
embedded right now in our vehicles, and the effort in a collaborative 
way between our domestic automobile industry and our Army vehicle 
industry, to give us lighter vehicles, more survivable vehicles, 
crashworthy vehicles, vehicles that use less gasoline, vehicles that 
have the global positioning devices that can say exactly where they are 
and communicate that, these technologies are embedded now and will 
continue hopefully to always be at the forefront, at the cutting edge 
of technology to give our troops what I know the Senator from Virginia 
has devoted his life to; that is, to giving our troops every edge we 
can.
  The big three not only has been part of that on the vehicles, as the 
Senator notably points out in terms of looking back, but that is the 
current situation--deep connections, synergies, collaboration going on 
as we speak, and planned for the years ahead.
  If we rip apart that connection, by allowing the big three to go 
under, that tremendous capability they have to join with the Army on 
vehicles, particularly, will be rendered useless or will no longer 
exist. That would be a terrible tragedy for our Nation's security.
  Again, I am glad my great friend from Virginia was able to come to 
the floor to share with me some thoughts about this relationship that 
is not only historical and one which we take great pride in as a 
nation, that ability to quickly expand, to turn a manufacturing, an 
industrial base into an arsenal of democracy.
  That hopefully will not happen, as the Senator points out. Maybe it 
is less likely to happen. But we must be there when it does. That 
aspect has been focused on by others, the need to be able to have a 
manufacturing base for our national security and to have a base of 
suppliers for our national security. I have tried to add another aspect 
to this argument that points to the relationship between the survival 
of our big three and our national security by pointing out the ongoing 
relationship in the area of research and development, which has 
produced critically important technologies currently in our vehicles 
and developing today the technologies which will make future vehicles.
  Mr. WARNER. Our military vehicles.
  Mr. LEVIN. Absolutely.
  Mr. WARNER. I wish to make that clear because that technology has 
been available in the open market to those manufacturers, other than 
the oil industry, which have, in a remarkable way, taken these up-
armored vehicles, that general category we have today, very quickly, to 
the great credit of the Secretary of Defense, Secretary Gates, he put 
together a structure of five companies to get into immediate production 
of those vehicles and into those vehicles has gone the development and 
technology that our distinguished colleague from Michigan has 
described.
  Mr. LEVIN. Thankfully, we still have a few colleagues, including the 
great Senator from Virginia, who have a personal connection to that 
war.
  Mr. WARNER. It was very minor, but it was a privilege to have been 
associated with that generation.
  Mr. LEVIN. I thank my friend from Virginia.

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