The Automobile Industry

Mr. DURBIN. Madam President, just a few weeks ago on the floor of the Senate, we passed legislation to give $700 billion to this administration to try to rescue America from its economic crisis. That money was being spent by the Secretary of the Treasury, Mr. Paulson, whom I respect, and he made an effort to try to save a key element of our economy--the financial sector--investing literally billions of dollars and buying equity and capitalizing investment banks and other institutions, including insurance companies, in the hopes that it would turn this economy around. There is scant evidence of any success.

Many questions have been raised about the wisdom and judgment of those investments, but the fact is literally hundreds of billions of dollars have been spent by this administration in an effort to rescue many financial institutions which had made fatal errors in judgment. They brought together rotten portfolios of bad investments on mortgage securities based on this subprime mortgage fiasco which we are now paying a bitter price for.

Tonight, we had an opportunity to loan money--a bridge loan--to one of the most important sectors in our economy: the automobile industry. Now, let me tell my colleagues at the outset, I buy American cars. I do it out of a sense of patriotic duty, and I find that most of those cars are good. But I expect more out of Detroit than I have seen in the past two decades. I have been disappointed--bitterly disappointed--by the positions the big three have taken on critical issues involving the environment, energy efficiency. They didn't seem to get it. When Toyota came out with its Prius, a hybrid car with great mileage, they were scoffed at by the leaders in Detroit. That is a car no Americans would want. Well, there is a waiting list now for those cars. When the price of gasoline reached $4 and beyond a gallon, many people started asking hard questions about the gas guzzlers Detroit put in the showrooms year after year. It seems Detroit was kind of caught in this mindset that they could make a profit by building more of their successful cars from last year. It ran out. It reached a point where they can't sell their cars, and they are struggling. I have some sympathy for them but not a lot when it comes to management. I think they have made some technical and strategic errors that they have paid a heavy price for.

I recall about a year and a half ago when the CEOs of the big three were just off this Senate floor in an office. We had a private meeting with about five or six Senators. They said: Do you have any questions? I said: I do. I said: I buy American cars. I have bought all your cars--GMs, Fords, Chryslers--I have owned them all, and I am pretty loyal to your companies. But I have a question to ask of you: Have any of you ever heard of the magazine Consumer Reports? There was this awkward silence in the room. Finally, a few of them said yes. I said: I read it, and I have been wondering for 20 years why the Japanese continue to build cars that are more reliable and more valuable at trade-in than American cars. How can that possibly be the case, in a country with the best engineering schools in the world and in a country that founded the automobile industry? How do you explain it, I asked. They paused, and the man from Chrysler said: I think we are getting better. Well, that is a pretty weak answer. They could have done better.

What broke down our effort this evening in trying to provide some sort of interim financing to the automobile companies so they will not go into bankruptcy--what broke down was a negotiation over one issue, and here is what it was, simply stated: There are those who believe automobile workers are paid too much money and get too many benefits such as health care. They think if those compensation packages were reduced, American cars would be more competitive against, for instance, Nissans or Toyota or Honda, even made in the United States. Well, they insisted in our negotiations that the wages of American autoworkers, all 130,000 of them, be brought down to the level of the workers at these foreign car companies in the United States by the end of March next year. A little over 3 months from now, they wanted a substantial reduction in salaries for these workers.

Now, United Auto Workers, which represents most of them, has already reached an agreement that as workers are bought out and retired, newer workers will come in at a lower wage scale. So, eventually, their workforce will have a lower wage but it will not work to the disadvantage of current workers. That is the plan. The Republican side of the aisle rejected that and said: You have to bring down their wages now. Think about that, in this economy. Think about that at a time when most American families are struggling--struggling to pay utility bills and for gasoline when it goes up high and all the other costs of living we face. The Republican answer was: Bring down those autoworkers' salaries and do it in a little over 90 days. I thought that was unfair.

Alan Reuther was in the room when we talked about it. He represents the United Auto Workers. He, of course, comes from the historic lineage of Walter Reuther, who helped found the United Auto Workers, and he explained what this would mean to so many of those families who count on those wages to put kids through college, to make sure they can get by and pay medical bills and things that are important to them, but we didn't have much luck in persuading those on the other side of the table.

There was an exception. Senator Corker of Tennessee--a Republican who did a magnificent job today--spent 5 hours that I was with him in negotiations doing his best to try to find a solution. He worked at it, and I admire him for it. In the end, he took his best work product to the Republican caucus and it was rejected. We came to the floor tonight and unfortunately saw the last remaining opportunity to help the auto industry die in a procedural vote that occurred a few minutes ago. It is going to be hard for a lot of people who voted against helping the automobile companies with a $14 billion loan to avoid losing 2.5 million American jobs to explain how just a few weeks ago they voted for $700 billion to bail out the biggest banks in America. They shed copious tears for Wall Street but couldn't bring themselves to empathize or be concerned enough to help the autoworkers and give them a vote today. I think that is unfortunate. It is beyond that. It is tragic. If the administration doesn't respond, through the Secretary of the Treasury and others, to help this industry, we may see some terrible days ahead when some of the biggest names in American business--some of the biggest employers in the American economy--are forced into bankruptcy. It will be a sad day.

I don't know if this rescue package would have worked. I am not sure. I don't know if it would have been enough, or whether it would have failed, but I thought we owed our best efforts to try to save an industry that means so much to America in so many States, whether it is Michigan or Indiana or Ohio or Illinois, thousands of workers, in Missouri, 55,000 workers; so many workers depend on this industry. We had a chance to do something for them tonight and we failed. We failed because we couldn't bring over enough votes from the other side of the aisle to come to the magic number of 60.

Tomorrow is another day. If the automobile companies can hang on until a new administration arrives, then perhaps we can find another way to help, a sensible way to give this industry a fighting chance. I hope they will use that time to think about the products for America's future, products that will be profitable but serve the needs of families and businesses and individuals, products that will protect our environment, save energy, move us in the right direction in technology. I know they can do it. Facing the challenge, I believe they will. Those managers and people who are the scientists and engineers at each of these companies can count on those men and women out there on the plant floor who have stood by them year after weary year doing their part to build the cars to try to keep their companies in business. We stood by those men and women tonight, those of us who voted to move forward. I am sorry we didn't come through.

I wish to especially thank my colleague, Senator Dodd, who worked so hard. I wish to also thank Senator Corker, as I mentioned earlier, and many others who played an important role. I wish to say, as I have said to them personally, how sorry I am to Senators Levin and Stabenow. That great State of Michigan has taken quite a beating when it comes to its economy, and tonight was not good news, but tomorrow is another day.

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Mr. DURBIN. Madam President, I salute my colleague from Pennsylvania for joining us in voting for cloture. He was 1 of 10 Republicans who did this evening. They were Senators Bond, Brownback, Collins, Dole, Domenici, Lugar, Snowe, Specter, Voinovich, and Warner. The motion required 60 votes. It had 53. It was seven votes short. The Senator from Pennsylvania took exception to my characterization earlier that the Republicans could have done more and helped us pass that. I want the Record to reflect that on the final vote, before Senator Reid changed his vote for procedural reasons, 43 of the 46 Democrats voted in favor of the motion. Ten Republicans voted in favor.

It is clear we could have had more, certainly, but it would not have been enough to make up the seven-vote deficit. When less than a third of the Republicans voted in favor of it, it is pretty clear that most of those on the other side of the aisle did not support that motion, despite the heroic vote by the Senator from Pennsylvania.

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