Corker Delivers Floor Remarks on Proposed Bailout of the Big Three U.S. Automakers

WASHINGTON, D.C. – U.S. Senator Bob Corker (R-TN) took to the Senate floor Thursday morning to discuss the proposed bailout of the Big Three U.S. automakers, Ford, Chrysler and General Motors.

Audio of Corker’s remarks is available at:  http://src.senate.gov/public/_files/radio/corker11_20_08.mp3

A transcript of Corker’s floor remarks follows.

“I rise today to talk about the proposed automaker bailout. I want to start by saying I have tremendous empathy for all of the people involved right now. I spent most of my life in business. I'm sure that these CEOs and others that are leaving these companies are going through bad times, and I empathize. I was a card-carrying union member, and I know there are a lot of workers in this country that are very concerned about their future, and I have tremendous empathy for them and for their families.

“This is actually a very serious time in our country's history. Regardless of where you are, I think people are concerned about the future. I was just in other parts of the world last week. All around this world people are concerned about the future.

“I do want to speak to the senator from Maryland's comments regarding the financial component and say that many of the car dealers that have called into our office actually are far less concerned about the Big Three.  They are more concerned about having financing for consumers that are coming into their dealerships. Like her [Sen. Mikulski], I want to see people throughout our country be able to operate their businesses. I'm certainly not here to defend any of the secretaries or anybody else. I will say I did have a conversation yesterday with Secretary Paulson and with Federal Reserve Chairman Bernanke. They are putting in place a facility to deal with consumer finance that hopefully will be in place by year end to help deal with some of the financing components that are stressing the automakers.

“I'd like to specifically, though, address the request by the automakers. I was privileged to be part of a hearing in Banking where the three CEOs testified.  I have to tell you, I was really struck by the lack of coherence.  We had three leaders in corporate America that I actually have a degree of respect for, but I was in some ways embarrassed for some of them. They evidently had no plan. I think they felt like in the Senate and in the House today the time was good for receiving money from taxpayers. It was sort of a “get here while the getting is good,” and it was really embarrassing to hear their testimony and the lack of thought that had been put into place as it related to their request. They had come up with a number of $25 billion. They were actually hesitant to tell us how, as a pact, the three of them had decided to divide this money up.  After a lot of probing we were able to get them to say that they decided to divide the money up based on their proportional share of the auto market here in our country.

“Mr. President, I pressed them to find out if we did, in fact, agree to loan them this $25 billion, would that be it?  And it was very evident that no, this was just a down payment and that they really had done nothing whatsoever to think about what might happen after the taxpayers invested in them.

“One of the questions I would like to ask is why would we address these three automakers as some homogeneous group?  They are three different companies in three different circumstances. It is very interesting to me that the head of the United Auto Workers knows that they are in three different circumstances. What he said was that Ford is actually in good shape. They made some tough decisions and did some things back in the year 2006 that have put them in place to actually survive. They have about $23 billion of cash right now.  He said he had been in to look at the books and Chrysler, believe it or not, was in second place. I would have thought Chrysler actually would have been the weakest of the three. Their books are not public because they are a private company, but he laid out the fact that actually Chrysler was in a stronger position, but that GM was a company that was in more disarray.

“So as we look at this I find it so irresponsible that we would actually even talk about a rescue package looking at these companies as a group. They are three very different companies that have addressed their issues in three very different ways, and I find it incredibly irresponsible to even consider looking at them as a group.

“I wonder in a market with ten million cars being sold why we need three domestic automakers, and I wonder whether we would be better off if possibly we had two or we had one that was really strong. But again that's something that the market can decide.   I think one of the greatest disservices we could actually do to these automakers and to the many people who depend upon them for employment -- whether they be direct employees or tier one or tier two suppliers -- is just to grant them this money. That would be a major mistake. These companies have all kinds of legacy issues that they have not been able to deal with.

“Let me just point out one.  General Motors has 7,000 dealers in this country. They probably need about 1,500 dealers. But what the dealers did years ago, they went around and got states to pass laws that said that GM could not do away with their dealerships. We have had strong dealers actually calling our office and telling us that they actually have hurt themselves by putting these state laws in place, because there are so many dealers that each of them are having trouble making a profit.  It would be a tremendous disservice for us just to grant money to the companies without causing them to reorganize.

“There is something we have in this country called bankruptcy protection.  There is something that allows companies to go in and reorganize, to put their strengths in order, do away with their weaknesses and actually carry on. And I do hope that as we debate this -- I realize nothing is going to happen this week; this was kind of a pre-application -- we will probably be dealing with this in January. I do hope that we will look at this in a mature way and realize these companies have not done the things that they should have done, maybe that they could have done, and that possibly we can be of service to them by making them do the things they need to do.

“Another example, Chrysler company has a situation where when they idle a plant they actually in some cases are obligated to pay the workers of those plants for up to four years beyond the time the plant has idled.  I have to tell you, I don't know of any business in the world that can survive in a healthy fashion with those types of obligations. 

“So, Mr. President, here is what I would say to you: I have tremendous empathy for the people involved. One of these companies has a plant in our state.  But I would just say to my colleagues in the Senate, the worst thing we could possibly do in this situation is to acquiesce to this request that lacked coherence, lacked thoughtfulness, lacked a plan, as to how the companies would be successful in the future and let them go about in their business in the way they have been going about it. They will be back if this money is granted. I just want to say I hope that we will stand firm, that we will be responsible with our taxpayers’ money and that even though I'm opposed to this, even if the money ends up being granted in some form or fashion, we will cause them to make the decisions that need to be made for them to actually be successful into the future.”

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