Government Loans for The Big Three Collapsed in The Senate

Written By: admin on December 12, 2008 No Comment

Thursday news, Government loans for emergency bailout for U.S. automakers collapsed in the Senate Thursday night after the United Auto Workers refused to accede to Republican demands for swift wage cuts.

Senate Majority Leader Harry Reid said he was “terribly disappointed” about the demise of an emerging bipartisan deal to rescue Detroit’s Huge Three.

He spoke shortly after Republicans left a closed-door meeting where they balked at giving the automakers federal aid unless their powerful union agreed to slash wages next year to bring them into line with those of Japanese carmakers.

Republican Sen. George V. Voinovich of Ohio, a strong bailout supporter, said the UAW was willing to make the cuts — but not until 2011.

Reid was working to set a swift test vote on the measure Thursday night, but it was just a formality. The bill was virtually certain to fail to reach the 60-vote threshold it would need to clear to advance.

Reid called the bill’s collapse “a loss for the country,” adding “I dread looking at Wall Street tomorrow. It’s not going to be a pleasant sight.”

The implosion followed an unprecedented marathon set of talks at the Capitol among labor, the auto industry and lawmakers who bargained into the night in efforts to salvage the auto bailout at a time of soaring job losses and widespread economic turmoil.

“In the midst of already deep and troubling economic times, we are about to add to that by walking away,” said Sen. Chris Dodd, D-Conn., the Banking Committee chairman who led negotiations on the package.
Sen. Bob Corker of Tennessee, the GOP point man in the talks, said the two sides had been tantalizingly close to a deal, but the UAW’s refusal to agree wage concessions by a specific date in 2009 kept them apart.

The autoworkers’ contract doesn’t expire until 2011.

Following the emergency bailout result, General Motors has hired a team of lawyers and bankers to determine whether the ailing auto maker should file for bankruptcy protection, according to The Wall Street Journal.

GM Chief Executive Officer Rick Wagoner pushed aside the notion of bankruptcy earlier, saying bankruptcy would severely hurt the company’s viability because people would lose faith in warranties.

How about the thousand workers in the company ?