Auto Bailout Dead, Unless White House Steps In

STEVE INSKEEP, host:

It's Morning Edition from NPR News. Good morning, I'm Steve Inskeep. There may be one more way to bail out the U.S. auto industry, and it might be one of the last ways, after a rescue package died last night in the U.S. Senate. The White House says it is prepared to act alone, and it can if President Bush decides to tap into money committed to save the financial industry. The Treasury Department says it could provide some short-term help until Congress can find a long-term solution.

And that matters because today is December 12th. Congress appears to be done for the year, and General Motors and Chrysler were warning that they could have trouble finishing this month without some help. GM and Chrysler do not have the aid they said they desperately needed. A somewhat healthier Ford is hoping for a loan guarantee. This last effort to help the auto firms came after marathon negotiations failed to produce a plan that satisfied enough lawmakers in the Senate. And we have more this morning from NPR's David Welna.

DAVID WELNA: Even before the Senate came up seven votes short last night of the 60 needed to keep an auto-industry bailout moving forward, Majority Leader Harry Reid saw what was coming. He declared to his colleagues on the Senate floor, it's over with.

Senator HARRY REID (Democrat, Nevada; Senate Majority Leader): I dread looking at Wall Street tomorrow; it's not going to be a pleasant sight. Millions of Americans, not only the auto workers, but people who sell cars, car dealerships, people who work on cars, are going to be directly impacted and affected.

WELNA: Senate Democrats earlier had made common cause with the White House to come up with a bailout plan to be overseen by a so-called car czar. But Senate Republicans opposed the plan. So, late yesterday Senate leaders agreed to essentially replace it with a proposal from Tennessee Republican Bob Corker. It would require the wages and benefits of United Auto Workers employees to come down to the level non-unionized workers are paid at foreign-owned auto plants. Corker says the reason the deal fell apart was the UAW workers did not want their wages to come down as quickly as Republicans wanted them to.

Senator BOB CORKER (Republican, Tennessee): What my colleagues would like to see is just a date certain when something is going to occur. We offered any date in the year 2009 - any date, any date - just when will we actually get there?

WELNA: The UAW workers preferred reaching wage parity in 2011, the year their current contract expires. Banking Committee Chairman Christopher Dodd, who was a lead negotiator, criticized the targeting of workers' wages as more political than economic.

Senator CHRISTOPHER DODD (Democrat, Connecticut; Chairman, Senate Committee on Banking, Housing and Urban Affairs): Because we're not demanding this of dealers, of suppliers, of anyone else. The only group we've asked this of are the workforce. No one else in this bill is required, on a date certain, to meet any other obligations, just this one.

WELNA: Michigan Democrat Debbie Stabenow had an even harsher take on the Republicans demands for an autoworkers' wage cram-down.

Senator DEBBIE STABENOW (Democrat, Michigan): We are in a position where, evidently, the only thing that matters to the majority of those on this side of the aisle is that workers get paid too much in this country.

WELNA: Still, many Republicans voted to kill the bailout simply because they don't believe in them. Here's the banking panel's top Republican, Richard Shelby.

Senator RICHARD SHELBY (Republican, Alabama): Bailouts generally don't work, and this is a huge proposed bailout. And I fear it's just the down payment on more to come next year. So, I'd vote no on this tonight.

WELNA: Other Republicans, such as Georgia's Johnny Isakson, are skeptical of claims that GM and Chrysler would go under if they did not get billions of dollars in bridge loans this month.

Senator JOHNNY ISAKSON (Republican, Georgia): I don't think you can accept at face value that there'll be a collapse. I think there will probably be a structured reorganization on behalf of GM, which is in the most danger.

WELNA: Ohio Republican George Voinovich, on the other hand, was one of 10 members of his party who broke ranks and voted to move ahead on the bailout.

Senator GEORGE VOINOVICH (Republican, Ohio): It just seems that some people are so ideological and so, you know, narrow that they don't see that we are not in the same situation we were five years ago. This is different. We are very, very fragile, and if we're not careful, we're going to go right off the cliff and we're really going to have something that we're going to be very, very sorry for.

WELNA: David Welna, NPR News, the Capitol. Transcript provided by NPR, Copyright NPR.