[Congressional Record (Bound Edition), Volume 154 (2008), Part 18]
[Senate]
[Pages 24758-24760]
[From the U.S. Government Publishing Office, www.gpo.gov]




                        THE AUTOMOBILE INDUSTRY

  Mr. DURBIN. Madam President, just a few weeks ago on the floor of the 
Senate, we passed legislation to give $700 billion to this 
administration to try to rescue America from its economic crisis. That 
money was being spent by the Secretary of the Treasury, Mr. Paulson, 
whom I respect, and he made an effort to try to save a key element of 
our economy--the financial sector--investing literally billions of 
dollars and buying equity and capitalizing investment banks and other 
institutions, including insurance companies, in the hopes that it would 
turn this economy around. There is scant evidence of any success.
  Many questions have been raised about the wisdom and judgment of 
those investments, but the fact is literally hundreds of billions of 
dollars have been spent by this administration in an effort to rescue 
many financial institutions which had made fatal errors in judgment. 
They brought together rotten portfolios of bad investments on mortgage 
securities based on this subprime mortgage fiasco which we are now 
paying a bitter price for.
  Tonight, we had an opportunity to loan money--a bridge loan--to one 
of the most important sectors in our economy: the automobile industry. 
Now, let me tell my colleagues at the outset, I buy American cars. I do 
it out of a sense of patriotic duty, and I find that most of those cars 
are good. But I expect more out of Detroit than I have seen in the past 
two decades. I have been disappointed--bitterly disappointed--by the 
positions the big three have taken on critical issues involving the 
environment, energy efficiency. They didn't seem to get it. When Toyota 
came out with its Prius, a hybrid car with great mileage, they were 
scoffed at by the leaders in Detroit. That is a car no Americans would 
want. Well, there is a waiting list now for those cars. When the price 
of gasoline reached $4 and beyond a gallon, many people started asking 
hard questions about the gas guzzlers Detroit put in the showrooms year 
after year. It seems Detroit was kind of caught in this mindset that 
they could make a profit by building more of their successful cars from 
last year. It ran out. It reached a point where they can't sell their 
cars, and they are struggling. I have some sympathy for them but not a 
lot when it comes to management. I think they have made some technical 
and strategic errors that they have paid a heavy price for.
  I recall about a year and a half ago when the CEOs of the big three 
were just off this Senate floor in an office. We had a private meeting 
with about five or six Senators. They said: Do you have any questions? 
I said: I do. I said: I buy American cars. I have bought all your 
cars--GMs, Fords, Chryslers--I have owned them all, and I am pretty 
loyal to your companies. But I have a question to ask of you: Have any 
of you ever heard of the magazine Consumer Reports? There was this 
awkward silence in the room. Finally, a few of them said yes. I said: I 
read it, and I have been wondering for 20 years why the Japanese 
continue to build cars that are more reliable and more valuable at 
trade-in than American cars. How can that possibly be the case, in a 
country with the best engineering schools in the world and in a country 
that founded the automobile industry? How do you explain it, I asked. 
They paused, and the man from Chrysler said: I think we are getting 
better. Well, that is a pretty weak answer. They could have done 
better.
  What broke down our effort this evening in trying to provide some 
sort of interim financing to the automobile companies so they will not 
go into bankruptcy--what broke down was a negotiation over one issue, 
and here is what it was, simply stated: There are those who believe 
automobile workers are paid too much money and get too many benefits 
such as health care. They think if those compensation packages were 
reduced, American cars would be more competitive against, for instance, 
Nissans or Toyota or Honda, even made in the United States. Well, they 
insisted in our negotiations that the wages of American autoworkers, 
all 130,000 of them, be brought down to the level of the workers at 
these foreign car companies in the United States by the end of March 
next year. A little over 3 months from now, they wanted a substantial 
reduction in salaries for these workers.
  Now, United Auto Workers, which represents most of them, has already 
reached an agreement that as workers are bought out and retired, newer 
workers will come in at a lower wage scale. So, eventually, their 
workforce will have a lower wage but it will not work to the 
disadvantage of current workers. That is the plan. The Republican side 
of the aisle rejected that and said: You have to bring down their wages 
now. Think about that, in this economy. Think about that at a time when 
most American families are struggling--struggling to pay utility bills 
and for gasoline when it goes up high and all the other costs of living 
we face. The Republican answer was: Bring down those autoworkers' 
salaries and do it in a little over 90 days. I thought that was unfair.
  Alan Reuther was in the room when we talked about it. He represents 
the United Auto Workers. He, of course, comes from the historic lineage 
of Walter Reuther, who helped found the United Auto Workers, and he 
explained what this would mean to so many of those families who count 
on those wages to put kids through college, to make sure they can get 
by and pay medical bills and things that are important to them, but we 
didn't have much luck in persuading those on the other side of the 
table.
  There was an exception. Senator Corker of Tennessee--a Republican who 
did a magnificent job today--spent 5 hours that I was with him in 
negotiations doing his best to try to find a solution. He worked at it, 
and I admire him for it. In the end, he took his best work product to 
the Republican caucus and it was rejected. We came to the floor tonight 
and unfortunately saw the last remaining opportunity to help the auto 
industry die in a procedural vote that occurred a few minutes ago. It 
is going to be hard for a lot of people who voted against helping the 
automobile companies with a $14 billion loan to avoid losing 2.5 
million American jobs to explain how just a few weeks ago they voted 
for $700 billion to bail out the biggest banks in America. They shed 
copious tears for Wall Street but couldn't bring themselves to 
empathize or be concerned enough to help the autoworkers and give them 
a vote today. I think that is unfortunate. It is beyond that. It is 
tragic. If the administration doesn't respond, through the Secretary of 
the Treasury and others, to help this industry, we may see some 
terrible days ahead when some of the biggest names in American 
business--some of the biggest employers in the American economy--are 
forced into bankruptcy. It will be a sad day.
  I don't know if this rescue package would have worked. I am not sure. 
I don't know if it would have been enough, or whether it would have 
failed, but I thought we owed our best efforts to try to save an 
industry that means so much to America in so many States, whether it is 
Michigan or Indiana or Ohio or Illinois, thousands of workers, in 
Missouri, 55,000 workers; so many workers depend on this industry. We 
had a chance to do something for them tonight and we failed. We failed 
because we couldn't bring over enough votes from the other side of the 
aisle to come to the magic number of 60.
  Tomorrow is another day. If the automobile companies can hang on 
until a new administration arrives,

[[Page 24759]]

then perhaps we can find another way to help, a sensible way to give 
this industry a fighting chance. I hope they will use that time to 
think about the products for America's future, products that will be 
profitable but serve the needs of families and businesses and 
individuals, products that will protect our environment, save energy, 
move us in the right direction in technology. I know they can do it. 
Facing the challenge, I believe they will. Those managers and people 
who are the scientists and engineers at each of these companies can 
count on those men and women out there on the plant floor who have 
stood by them year after weary year doing their part to build the cars 
to try to keep their companies in business. We stood by those men and 
women tonight, those of us who voted to move forward. I am sorry we 
didn't come through.
  I wish to especially thank my colleague, Senator Dodd, who worked so 
hard. I wish to also thank Senator Corker, as I mentioned earlier, and 
many others who played an important role. I wish to say, as I have said 
to them personally, how sorry I am to Senators Levin and Stabenow. That 
great State of Michigan has taken quite a beating when it comes to its 
economy, and tonight was not good news, but tomorrow is another day.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Pennsylvania is recognized.
  Mr. SPECTER. Madam President, I have sought recognition to comment on 
the cloture vote and to give my reasons for voting in support of 
cloture. Before I do, however, I wish to comment about where the 
responsibility lies for failure to invoke cloture to move this bill 
forward, and my hope that we would avoid fingerpointing and trying to 
assess blame, each on the other side, as has become the pattern in this 
body during the course of the last 2 years of the 110th Congress and 
beyond.
  The Senator from Illinois said there were not sufficient votes on the 
Republican side of the aisle. Well, there were sufficient votes on the 
Republican side of the aisle, had they been joined with sufficient 
votes on the Democratic side of the aisle. There were 10 Republican 
Senators who voted to invoke cloture: Senator Bond, Senator Brownback, 
Senator Collins, Senator Lugar, Senator Voinovich, Senator Warner, 
Senator Dole, Senator Domenici, Senator Snowe, and myself.
  There are 51 Senators on the other side of the aisle. Had those 51 
Senators--or 50 of them joined with the 10 Republican Senators, cloture 
would have been invoked. But it would be my hope that we would leave 
this evening without partisan blame and still seek some way to get the 
kind of economic assistance that would enable the Big Three to continue 
to operate.
  The issue that we face has enormous potential adverse economic 
consequences. I will read from a portion of a statement I had prepared 
in a little different direction, but this portion of the statement I 
had prepared specifies the scope of the economic problem, which is 
potentially present if the three big automobile manufacturers do not 
stay in business.
  A failure of the automakers could have a cataclysmic impact on the 
broader economy. The Big Three employ 240,000 workers directly and, 
more broadly, the U.S. auto industry represents almost 4 percent of the 
gross domestic product and impacts 1 out of every 10 U.S. jobs in some 
form, directly or indirectly. These jobs are at part suppliers, 
dealerships, banks, and many other lines.
  According to the Center for Automotive Research, 3 million jobs would 
be lost if the Big Three were to fail. They estimated that the 
Government could stand to lose up to $156 billion over 3 years in terms 
of reductions in Social Security receipts, personal income taxes paid, 
and an increase in transfer payments.
  According to the Anderson Economic Group, if at least two of the 
three were to file for bankruptcy, it would cost the taxpayers up to 
four times the amount of the proposed bridge loans in the form of lost 
income and tax revenue resulting from the massive employment losses. 
They estimate that more than 1.8 million auto-related jobs would be 
lost in the first year, and there would be nearly $70 billion less in 
Federal and State tax revenue over a 2-year period. Credit and related 
markets would be further disrupted, more U.S. manufacturing would move 
overseas, and foreign automakers would gain an even greater advantage.
  According to the Economic Policy Institute, a bankruptcy of one or 
more of the Big Three would result in losses of up to 3.3 million jobs. 
The U.S. trade deficit could rise by at least $110 billion per year as 
imported vehicles displace domestic brands, increasing the trade 
deficit by 16 percent and putting additional downward pressure on the 
U.S. dollar and living standards. An increase in Government payments 
and tax losses alone would exceed $150 billion in the first 3 years 
following bankruptcy.
  I recite that in some detail to articulate the scope of the potential 
devastating impact if the three major auto manufacturers in the United 
States are unsuccessful. In voting to invoke cloture, I think it should 
be understood that I was not voting in favor of the House bill. I think 
the House bill needed vast improvement. But had we taken up the bill, 
that would have given us an opportunity to offer amendments, to debate, 
and to function as the world's greatest deliberative body. The House 
bill, in my judgment, didn't give sufficient authority to the so-called 
car czar. The House bill added to it, beyond what was agreed to by the 
Democrats in the Senate and the White House, a provision which would 
have terminated the litigation brought by the automotive industry 
against the State of California on the issue of toxic emissions.
  I do not know who would have prevailed in that suit, but I think 
there ought not to be congressional action to get off that litigation. 
That is a matter for the courts. Under our well-established doctrine of 
separation of powers, that should have been in the bill. At any rate, 
had the Senate taken up the bill, which is what the cloture motion 
meant--people may be watching on C-SPAN 2 and don't understand all of 
the arcane Senate talk, but a cloture motion is a motion to cut off 
debate on a motion to proceed. It simply means that the Senate will 
proceed to consider the issue as formulated in the House bill, as 
formulated in the vehicle laid down by the majority leader, and then 
the Senate has the opportunity to offer amendments and to debate.
  We have been in session, as the distinguished Presiding Officer 
knows, since 3 o'clock on Monday. We were here a good part of Monday, 
all day Tuesday, all day Wednesday, and it is now 11:36 p.m. eastern 
time on Thursday. The first time we came to the floor to have a 
discussion on this matter was a short time ago. The deliberations were 
carried on behind closed doors. Well, deliberations ought to be carried 
on behind closed doors to try to work through and find compromises and 
have free-wheeling discussion. But it would be appropriate, it seems to 
me, for the Senate to come to the floor and talk about what has been 
decided. The discussion started on the Senate floor a little after 9 
o'clock and came to a conclusion a little more than an hour later. At 
10:45, we had the motion to invoke cloture--that is, to cut off debate.
  We pride ourselves in the Senate as being the world's greatest 
deliberative body. Well, why not deliberate--deliberate in public? 
There is nobody in the galleries at the present time, but why not 
deliberate in public? We are now carried on C-SPAN 2, on television 
across the country, and across the world perhaps. So people can see 
what we are doing, and they can see what the considerations are.
  The Senator from Illinois made a statement that it was required under 
the proposal of the Republicans to have the concessions made on wages 
within a little more than 90 days in March. The Senator from Tennessee, 
who has been applauded in this body for the outstanding work he has 
done, said any time during the year 2009. Well, had the two Senators 
been on the floor and been discussing the matter, perhaps we

[[Page 24760]]

would know exactly what went on behind those closed doors, what the 
arrangement was.
  I compliment my colleagues for the hard work that went into the 
efforts to try to reach a compromise. They did work hard. But it seems 
to me that we all ought to be working harder. We have more time. As the 
Senator from Tennessee outlined the situation, we were very close, as 
he put it, with three words separating the parties. Perhaps if we 
debated the issue, somebody would have changed a position a little. 
Senator Corker was correct that there didn't need to be a very big 
change. Also, when you make the arguments in public, you are under a 
little more scrutiny than making them in a back room behind closed 
doors where very few people can hear what you are saying, a few people 
can evaluate what you are saying, and there is little room for 
criticism, as opposed to making it on the floor of the Senate where 
everybody can see and hear what you are doing and you have to stand 
behind what you are doing. Or perhaps the parties who could not come to 
an agreement by tomorrow morning overnight would change their 
positions.
  It seems to me that there would be nothing to be lost by invoking 
cloture and by debating the matter further and by seeing if we can't 
come to some compromise and some adjustment. There is simply too much 
involved as the facts that I have cited earlier in this brief statement 
reflect on the potential economic destruction and losses.
  I concur with the Senator from Illinois about the hardship on the 
workers and the loss of salary and the loss of opportunity to support 
their families and pay tuition and monthly payments on the mortgage, et 
cetera, et cetera. No doubt about that. It is my view that we have a 
duty to go beyond the cloture vote and to take up the matter. I have 
not given up hope that something may yet be done. The President had 
backed--and I think still would--the bill that was submitted for 
consideration--the House bill--absent the issue with respect to the 
litigation, and perhaps there will be a way yet to find these bridge 
loans. Certainly, the amount of money involved, while not 
unsubstantial, is not enormous compared to the other bailouts that have 
occurred, compared to the total amount which the Congress authorized--
the $700 billion figure. In supporting the legislation which Senators 
Levin, Stabenow, Bond, Voinovich, Brown, and I had proposed back on 
November 20, that was an effort to try to have some deliberation. I was 
not committed to that bill.
  I am certainly not committed to any of the proposals that have yet 
been offered. But it would have been my hope that in the course of the 
debate and discussion, and an opportunity by others and myself to offer 
amendments, that we could have worked the will of the Senate to find 
our way through to move ahead on a short-term basis, a plan could be 
constructed that was realistically calculated to succeed.
  I am not in favor of throwing good money after bad. I believe 
philosophically as a matter of public policy that the Government ought 
not to pick winners and losers. That ought to be the decision of the 
market. The Government ought to intervene on economic aid or bailout 
only where the consequences are potentially so disastrous that they 
would deviate from that principle.
  As we conclude this situation, I think this Senate could have done 
considerably better. I know many of us will continue to work with the 
administration and with the parties involved.
  I convened on December 2 a meeting in Philadelphia with high-ranking 
executives from Ford, Chrysler, General Motors, and labor leaders in 
Pennsylvania, the United Auto Workers, the AFL-CIO statewide, and the 
Philadelphia Labor Council; and auto dealers and suppliers and 
economists and bankers came together to describe the scope of the 
problem.
  We had a meeting in the Lehigh Valley to grapple with the issue. 
Certainly, the impact on my State as a microcosm reflects the 
tremendous potential impact on the Nation as a whole. So we need to 
continue to work to do our best to find some answer administratively to 
avoid the potential disastrous consequences which I have enumerated.
  I yield the floor.
  Mr. DURBIN. Madam President, I salute my colleague from Pennsylvania 
for joining us in voting for cloture. He was 1 of 10 Republicans who 
did this evening. They were Senators Bond, Brownback, Collins, Dole, 
Domenici, Lugar, Snowe, Specter, Voinovich, and Warner. The motion 
required 60 votes. It had 53. It was seven votes short. The Senator 
from Pennsylvania took exception to my characterization earlier that 
the Republicans could have done more and helped us pass that. I want 
the Record to reflect that on the final vote, before Senator Reid 
changed his vote for procedural reasons, 43 of the 46 Democrats voted 
in favor of the motion. Ten Republicans voted in favor.
  It is clear we could have had more, certainly, but it would not have 
been enough to make up the seven-vote deficit. When less than a third 
of the Republicans voted in favor of it, it is pretty clear that most 
of those on the other side of the aisle did not support that motion, 
despite the heroic vote by the Senator from Pennsylvania.

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