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McConnell Renews Call for Taxpayer Protection, Business Reform
from the Office of Senator Mitch McConnell
Tuesday, December 9, 2008
‘I want to support a bill that revives this industry. But I will not support a bill that revives the patient with taxpayer dollars yet doesn’t secure a commitment that the patient will change its ways so future help isn’t needed’
WASHINGTON, D.C. – U.S. Senate Republican Leader Mitch McConnell made the following remarks on the Senate floor Tuesday regarding proposed auto legislation:
“The auto industry is vitally important to our nation’s economy and it is vitally important to my home state of Kentucky. This is not in dispute. The question before us is how to reverse the decline of some of these auto manufacturers after decades of complicity between management and labor.
“I understand congressional Democrats sent a revised proposal to the White House late last night. We will reserve our judgment until we see the latest text. But the proposal we saw yesterday afternoon fails to achieve our goal of securing the long-term viability of ailing auto companies.
“I want to support a bill that revives this industry. But I will not support a bill that revives the patient with taxpayer dollars yet doesn’t secure a commitment that the patient will change its ways so future help isn’t needed.
“To do so would be a betrayal of the millions of hardworking taxpayers who are not at fault for the troubles in the auto industry. And it would be unfair to the millions of Americans who depend on these companies.
“On the management side, the draft plan released yesterday fails to require the kind of serious reform that will ensure long-term viability for struggling auto companies. By giving the government the option of cancelling government assistance in the event that reforms are not being achieved – rather than requiring it – we open the door to unlimited federal subsidies in the future.
“Instead, we should demand that management make the tough choices that are required for long-term viability. This is the only fair approach from the standpoint of the taxpayer, who’s footing the bill.
“On the labor side, this bill proposal fails to require any serious reform of legacy costs. Indeed, it states explicitly that one of its purposes is to preserve the same retirement and health care benefits that have made these companies so uncompetitive. It’s delusional to expect a company that spends $71 per labor hour to compete with a company in a neighboring state that spends $49 per labor hour.
“In short, this proposal is deeply flawed because it fails to assure taxpayers — who rightly expect us to be good stewards of their hard-earned money — that they will not be asked to shell out billions more a few years or even a few months from now.
“There are times when help is needed. But one thing most people expect when they’re asked for help is that the one asking makes a commitment to change. This proposal does not go nearly far enough. It holds neither management nor labor truly accountable. And in areas where one side is held accountable, the other side isn’t. One example is a provision that requires automakers to drop all legal challenges to state fuel economy standards that are inconsistent with the federal standard.
“Where is the offer from our friends on the other side to call on environmental groups to drop their lawsuits? Democrats say they want to solve this problem as much as we do. Yet they seem all too eager to tip the scales to the detriment of the manufacturers. There is plenty of blame to go around for the problems that ail the auto industry. But fixing half of a problem is not a real solution.
“Any successful proposal would force companies to reform, either inside of bankruptcy or outside of bankruptcy. Without that mandate, there can be no real expectation of reform.
“A good proposal would force automakers to get control of their benefit costs.
“A good proposal would make wages at struggling companies competitive with other automakers — not tomorrow, but today.
“A good proposal would end the practice of paying workers who don’t work.
“And a good proposal would rationalize dealer networks. Just as struggling airlines adjust their capacity to respond to market conditions, automakers must respond to market demands as well.
“I regret to conclude that this proposal Republicans saw yesterday afternoon does not do enough to fix the whole problem. It subsidizes it. A real solution must protect the taxpayers by forcing the changes needed to put these companies on a path to long term success.”
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