Tennessee Senator Bob Corker (R, the Fightin’ Transplants!), also known as the “Senator from Nissan,” sent out an update from his office today and his version of events surrounding the auto industry crisis are a little different (aka more partisan than necessary) than the one in this week’s extraordinarily comprehensive New Yorker story. Compare and contrast.
From Sen. Corker:
In December our office tried to broker a deal that would have resulted in bipartisan support and provided a viable road map for General Motors to move forward. As we worked through that plan, every stakeholder agreed to shared sacrifice except the United Auto Workers, where we met resistance. In fact, somehow in offering a plan to help the company survive, one that made common sense and would have garnered bipartisan support, I became public enemy No. 1 with the UAW and the AFL-CIO.
A little more detail from The Road Ahead: Smyrna, Tennessee, vs. Detroit, by Peter J. Boyer (The New
Corker Yorker), reveals that “except the UAW” is not quite accurate:
The Republican leadership asked Corker to introduce his plan as an amendment that would supersede the House bill, and Corker and [Senate Banking Committee Chair] Dodd began frantic negotiations with the union, representatives of the bondholders, and the automakers. Corker says that the union agreed to accept stock for cash for its VEBA [Voluntary Employee Beneficiary Association] trust, and key bondholders indicated that they would accept an equity swap. Alan Reuther, the U.A.W.’s Washington lobbyist, agreed to put his workers on a par with those of the transplants [Nissan, Toyota, and Honda], but refused to commit to the 2009 deadline. The Republicans wouldn’t support the bailout without the timeline in place, and the Corker amendment was shelved. The House proposal was debated that night, and it, too, went nowhere.
A little red meat from the Senator:
We do know the results now. In one fell swoop, our government has taken over a company â€” it fired the CEO, replaced the board, is involved in making decisions about which plants will survive and what kind of cars they will make, and now appears to be directing the company to bankruptcy. In bankruptcy, the same UAW contracts that were the focus of our negotiations in December would change dramatically and bondholders would take huge write-downs on their investments. Unfortunately, because these steps weren’t taken in December, billions of taxpayer dollars are now down the drain and more stringent, draconian measures will be put in place.
Not really “one fell swoop,” says Boyer. The current administration had a little help:
A week later [the second week in December 2008], Bush [President George W.] announced that the Treasury Department would lend G.M. and Chrysler $17.4 billion, on terms that generally accorded with Corker’s plan. “Look, I got all your stuff in there,” Bush told Corker in a telephone call that day. In exchange for the loan, to be paid in installments, the government required G.M. and Chrysler to achieve the VEBA and bondholder debt reductions, and to have a plan by March 31st to bring costs in line with those of Nissan, Toyota, and Honda.
Also from Boyer, why a little interference might be necessary to protect our investment:
In late February, [Obama auto task force advisers] Bloom and Rattner began studying the industry, and what they learned was sobering. They learned, as just one example, that G.M.’s dealership-distribution system is hopelessly our of proportion. Honda has thirteen hundred dealerships in the U.S., and Toyota – G.M.’s chief rival – has about fifteen hundred. G.M. has more than six thousand dealers who are protected by state franchise laws. It will cost the company billions of dollars just to reach parity with the Japanese-owned companies.”
And according to Boyer, Senator Corker doesn’t think Barack Obama is really all that bad:
When Barack Obama took the oath of office, he found himself overseeing the biggest industrial restructuring in history, largely on Corker’s terms. “Obama has a tremendous opportunity,” Corker said, “I think this is one of those defining moments for him.”
Regardless of what got us here, the members of the UAW across Tennessee are my constituents, and though they may have disagreed with my approach this fall, there should be no doubt that I want the very best for them, their families, and the many people throughout our state who depend on the auto industry.
Self-serving Coker from Boyer:
When the automakers first came to Washington, the Southern Auto Belt senators, including Corker, had generally agreed about the proposed bailout. For reasons of ideology (let the marketplace rule) and self-interest (the U.A.W. had donated heavily to their opponents), they were inclined to let Detroit fail. Corker’s voice had been the most prominent in the first round of hearings, but when they ended, he felt he still didn’t know enough to advocate for bankruptcy. On December 1st, the beginning of the week that the second round of hearings was scheduled to be held, Corker flew to New York for a series of meetings with auto-industry analysts and G.M. bondholders….When Corker returned to Washington, he began to work out an alternative to bankruptcy.”
The Senator from Nissan has actually done some good work in this area but until he stops manipulating facts so he can demonize the groups who donated heavily to his opponents and/or slap inappropriately used epithets on the President, he’s wasting his time.
The New Yorker article touches on so many things: Tennessee history (Sam Ridley and Smyrna), Nissan history, Nissan in Smyrna history, Detroit history, GM history, U.A.W. history, labor practices at the Smyrna plant, labor practices at the Big 3 plant, the role of both unions and management in the demise of the Big 3, jobs banks, etc.