[Congressional Record (Bound Edition), Volume 155 (2009), Part 6]
[Senate]
[Pages 8051-8052]
[From the U.S. Government Publishing Office, www.gpo.gov]




                      AMERICAN AUTOMOBILE INDUSTRY

  Ms. STABENOW. Mr. President, I wish to speak a little bit today about 
a subject near and dear to my heart, and that is our American auto 
industry.
  Before the global credit crisis happened, our American auto industry 
was undertaking ambitious restructuring plans. I know there are those 
who haven't been aware of that up until now but in fact it is true.
  For the past decade, our American auto industry has been moving 
toward improved fuel efficiency, improved quality, and advanced 
technologies. I am very proud of what the men and women in our country 
do in terms of building our American automobiles. This was clearly 
shown as the auto industry laid out the plans before Congress last 
December. The companies and the workers have been making tremendous 
sacrifices even before they were asked to do so, to level the playing 
field with foreign competitors. The idea of cutting, restructuring, 
layoffs, plant closings are not new. They are, unfortunately, a way of 
life at the moment in Michigan and other manufacturing States where 
there have had to be major sacrifices, particularly for workers and 
their families.
  By the end of the current 2005 and 2007 contracts for workers, the 
labor cost gap between domestic and foreign automakers would have been 
largely eliminated. They also eliminated 50 percent of the companies' 
liability for retiree health benefits, and that is before any of the 
current debate. It was also before the global credit crunch happened. 
The global credit crunch has hit everybody--every business, large and 
small, every consumer, every family, every homeowner.
  Certainly our auto industry has seen the brunt of the inability to 
get capital, the inability of people to get a car loan, our auto 
dealers and the challenges they have had, our auto suppliers, as well 
as the OEMs.
  The failure of our auto industry, if we allow them to go down because 
of a global credit crisis, would mean a loss of over 400,000 supplier 
jobs and over 450,000 jobs in the service sector, national deficits, 
and reductions in personal income. It would be a huge catastrophe if we 
were to allow the global credit crisis to create a situation in which 
we would no longer have an American auto industry.
  It is important for us to understand that this crisis has similarly 
affected the foreign automakers, forcing them to request help from 
China, Canada, Japan, Spain, Great Britain, Brazil, as well as numerous 
other countries.
  We find ourselves in a situation where this credit crisis has 
profoundly affected the backbone of manufacturing in the United States. 
We have seen firsthand in Michigan the challenges that GM, Ford, and 
Chrysler have faced. We now have a White House auto task force that has 
been set up to work with General Motors and Chrysler, which have asked 
for assistance from us in this global credit crisis.
  Today we had a very important announcement to help the industry as a 
whole. I thank the White House auto task force for understanding that 
along with our automakers, it is critically important that our 
suppliers be able to pay their bills, supply the parts, and continue to 
be a very important part of this industry as a whole.
  I very much appreciate the fact that a very positive action was taken 
today by the auto task force to help make capital available during this 
credit crisis for our tier 1 suppliers.
  Our American auto industry represents about 4 percent of our gross 
national product and 10 percent of our industrial production value. Our 
auto industry provides health care and pensions to over a million 
retirees and their families who live all over the country, by the way, 
not just in Michigan, although we certainly would welcome them back. 
But they live all over the country.
  Auto parts suppliers provide hundreds of thousands of jobs. They are 
the leading U.S. manufacturing employer. That, again, is why the 
decision that was made today to make capital available for our auto 
suppliers is so important.
  In turn, those direct jobs contribute to 4.5 million--4.5 million--
private industry jobs across the country. That is an additional 5.7 
jobs for every single direct supplier job. We are talking in general 
about an industry that touches every State--not just Michigan, not just 
Ohio, not just Indiana, but every single State.
  The domestic auto industry comprises more than 10 percent of the high 
yield bond market and is one of the largest sectors in leverage finance 
for the banks. They spend over $12 billion a year on research and 
development. Without this funding, our country would become dependent 
on foreign ideas and foreign technology that would threaten our role 
not only in innovation and in the global economy but in our national 
defense as well.
  I come today to say that failure is not an option when it comes to 
the viability and support for our American auto industry. Right now, if 
one or more of the American auto companies is allowed to fail, then we 
can expect as many as 3.3 million lost jobs in the next year. When we 
think about what we are doing in the stimulus package, in the recovery 
package, and we think about 3.3 million jobs that would be lost in the 
auto industry alone, it is stunning.
  Think about the recovery plan and the fact we are talking about 
creating or saving 3.5 million jobs--3.5 million jobs lost if one of 
the companies went down. This is a big deal. This is a huge issue for 
us. That is why I have fought so hard, along with Senator Levin and 
other colleagues, to make sure we are doing everything possible to 
create a level playing field for the American auto industry so we can 
maintain these jobs and the strong role--the vital role--they play in 
this economy.
  It is not only about workers--direct workers or indirect workers. The 
fallout, if we were to see a company fail, would hit thousands of 
businesses that depend on the auto industry, from parts suppliers to 
dealers to service industries, body shops, consultants, advertisers, 
janitorial services--all kinds of other jobs, not counting the 
restaurant across the street from the plant. When the plant closes, the 
restaurant goes or the shoe store down the street goes. The drugstore 
goes. These are basic jobs, huge parts of the economy of thousands and 
thousands of communities across this country.
  Also, let me be clear that the foreign automakers would be hurt as 
well because manufacturers share so many suppliers. Without the 
business from Detroit, those suppliers would fail. Many dealers own 
U.S. and non-U.S. dealerships, and they would not be able to keep 
operating without the American brands in the mix. That is why I am very 
pleased that the leadership of Toyota met with the auto task force to 
urge them to support the American auto industry through this global 
credit crisis because they know better than anyone that they share the 
same suppliers.
  Again, that is why the decision today by the auto task force is so 
important, to support tier 1 suppliers because this supports the 
automakers, foreign and domestic, all over America. This is very 
important. It would have catastrophic effects on several States already 
suffering from some of the Nation's highest unemployment rates if, in 
fact, we would see one or more of these companies go down.
  Let me show some of the numbers when we talk about what happens in 
terms of unemployment and the devastation across the country--people 
are out of work right now--and what would happen if our American 
automakers were not supported so they can continue. We would see a 
shutdown that would increase unemployment levels to over 10 percent in 
Indiana, Ohio, Rhode Island, Kentucky, South Carolina, Tennessee, 
California, Oregon, North Carolina, Mississippi, Nevada, Alabama, 
Missouri, Illinois, and Georgia.
  My home State of Michigan already suffers from 11.6 percent 
unemployment. I understand how painful that is for communities. Rhode 
Island could lose over 9,000 jobs if we were to see one of our American 
automakers go under--9,000 jobs. Kentucky could lose 75,000 jobs and go 
to 11.9 percent unemployment. South Carolina could lose

[[Page 8052]]

over 58,000 jobs and go to an unemployment rate of 11.9 percent.
  To continue, Tennessee could lose over 106,000 jobs as a result of 
one of our three domestic automakers going under, which would bring 
their unemployment rate to 11.8 percent. California could lose over 
300,000 jobs.
  My point, whether it is Tennessee, California, Oregon, North 
Carolina, Mississippi, or other States is clearly what happens in 
Detroit does not stay in Detroit. That is the point. What happens in 
Detroit affects automakers and Americans all over the country, families 
who depend on a paycheck from a direct job in the auto industry or a 
supplier or some other small business. Others would be forced in a 
recession to find work that is not there. People are barely making it 
as it is.
  My message overall, again, is that what happens in Detroit doesn't 
stay in Detroit. It goes all over the country. That is why the work of 
the White House auto task force is so important and why I appreciate so 
much their willingness to delve deeply into these issues and look at 
the facts--not the rhetoric but the facts--and determine what is best 
for the taxpayers, for American families, and for the economy. We owe 
it to American families. We owe it to the people of Michigan as well.
  Part of what they are looking at is the fact that the failure of the 
American auto industry would put a disastrous burden on top of job 
loss, a disastrous burden on the Pension Benefit Guaranty Corporation 
that already faces massive shortfalls, a burden that could trigger tens 
of billions of dollars in additional pension obligations.
  The reality is, those who say let GM go bankrupt, let Chrysler go 
bankrupt, the obligation to the American taxpayer from pensions alone 
would far exceed the relatively small request, certainly compared to 
AIG or Citigroup or any of the other Wall Street requests, a small 
request, relatively speaking, to keep over 3.5 million people working 
in this country in good-paying jobs.
  It would have a debilitating ramification for our industrial base 
which would undermine our military challenges, which I mentioned 
before. I was at a terrific business on Monday that makes equipment for 
large trucks, our big long-haul trucks, a great American business 
called ArvinMeritor. When we look at what they make for those big 
trucks, the same kinds of brakes, the same kinds of axles, the battery 
they are developing for a hybrid truck, our largest trucks--all of 
those are technologies that either are used or will be used by the 
military, trucks that are being driven in Iraq, military vehicles 
around the world.
  If we lose an American capability to manufacture vehicles, we affect 
the Department of Defense and we affect every single man and woman who 
is serving us today in protecting our country by saying to them: We are 
going to now rely on foreign companies for our vehicles for the trucks 
they drive, the cars they drive, the tanks they drive. That doesn't 
make any sense at all.
  We all have a stake in what happens in Detroit. We all have a stake 
in what happens to our American manufacturers and our American auto 
industry. We need a 21st century manufacturing strategy that is focused 
on American manufacturing, advanced manufacturing, as well as national 
security and energy security. Our automakers are an important part of 
that, but so are our other suppliers, our other manufacturers.
  One of the things I so appreciate about President Obama's vision is 
that he understands we need to manufacture in this country. The budget 
he has given us focuses on our ability to create jobs through 
manufacturing, through manufacturing in the new energy economy, and in 
the traditional areas of manufacturing. In America, we need a 
revitalized advanced manufacturing base. That will be a major part of 
our economic recovery as a country.
  Again, none of us can afford for our American automakers to fail. 
There is not a State represented here that can afford for that to 
happen. Failure would mean loss of jobs, a loss of capacity for our 
national defense, and the ability for us to build on an energy 
independence for the future.
  Again, what happens in Detroit doesn't stay in Detroit. It affects 
every State, every American, and I very much appreciate the commitment 
of the White House auto task force and President Obama to work with us 
for a vital and vibrant auto industry for the future.
  Mr. President, I yield the floor.

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