Congressman Burton's Floor Statement on the Auto Bailout

(Washington, D.C.) – Congressman Burton addressed the U.S. House today regarding HR 7321, the Auto Industry Financing and Restructuring Act. Below is the text of his floor statement from the Congressional Record:

I thank the gentleman for yielding, and I just want to say to Mr. Kucinich and all the previous speakers, I agree with most of what I have heard today, except the way we get there. I don't think anybody in the House or the Senate wants the auto industry and related industries to collapse. Nobody wants that. The question is, how do we get to a solution that is workable, that will work over the long term?

Just a few weeks ago we passed the TARP bill, and we were told in just a day or two that we had to pass this or the entire financial system in this country and the world was going to collapse. We threw $700-plus billion at it, and today there are an awful lot of Members in both bodies that think, hey, it isn't working the way we thought it would. Things have gone south in a lot of areas, and we should have thought about this a little more carefully.

Now, I had the mayor of Marion, Indiana, and a lot of GM executives come in to see me last week and they told me in Marion, Indiana, they would lose $5 million in tax revenue if these companies go under.

And they would have to lay off firemen and policemen and other civil employees. Nobody wants that to happen. But how do we solve the problem long term?

And my concern is we're throwing $15 billion at this right now without a solution. We're going to have these people come to the conference table after we give them $15 billion, just like we gave the $700 billion a few weeks ago in the TARP plan, and we're going to say, now go solve the problem and come up with an answer. We need to have these answers first, and then give them the money.

I don't mind staying here through Christmas and New Years to find a solution to save the automobile industry and the related industries. But this isn't the way, in my opinion, to do that.

Now, you know, Senator Corker, in the other body, said, here's the way that we ought to solve the problem; and I'd like to read this to my colleagues. He said, Number 1, the manufacturers should give existing bondholders 30 cents on the dollar to help reduce their overall debt. Right now they'd only get 13 cents on the dollar, so 30 cents on the dollar would make them happy, and they would agree to that. And Senator Corker said this ought to be one of the things that's in the plan.

Second, he said, wages should immediately come in-line with the transplant companies. And I think everybody that thinks about this realizes that if your cost of doing business is not competitive with your opposition, you're not going to survive. So that's an essential thing, in my opinion.

Third, the UAW should take half of GM's payment in the Voluntary Employees Beneficiary Association in GM stock; and I think they should do that because they're in this thing with everybody else, and taking half of their benefits in stock would be a great thing. And I think
they would enjoy doing that if they knew the company was going to survive. And they want it to survive.

And finally, the Jobs Bank program should be eliminated. He said, if you had these four things as a starting point, we could get on with the business of solving this problem.

Now, at the hearing in the Senate Banking Committee the other day, Mark Zandi, who is the Chief Economist and Co-Founder of Moody's Economic Guide said, testified, ``under the most likely outlook for the economy and the auto industry, the restructuring plans in which the Big
Three have requested $35 billion in loans,'' at that time it was $34 billion, ``will not be sufficient for them to avoid bankruptcy at the same point in the next 2 years. They would ultimately need another 75 to $125 billion to avoid bankruptcy.''

Now, we need to solve this problem. I want to help those employees. I want to help the executives. I want to help the communities that will suffer if they lose the tax revenues from these people who would lose their jobs and if the industry went south. I want to solve it. But rushing to judgement today, just like that, and throwing $15 billion at it, without a solution, in my opinion, is the wrong way to go.

So I'd just like to say to my colleagues, if you really want to solve this problem long term, let's don't rush to judgment today. Let's stick around here a few more days and work this out so we can really solve the problem long term so the industry can survive.

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