Auto Bailout Vote A-Comin’ (Don’t expect passage)
November 19, 2008
“The result of the election will also leave Democrats operating shorthanded. Mr. Obama, of Illinois, resigned his Senate seat as of Sunday, and Senator Joseph R. Biden Jr. of Delaware, the vice president-elect, is not expected to be voting. Those absences and others will complicate Democratic efforts to get 60 votes for the auto bailout in a vote expected on Wednesday. In the House, Representative Rahm Emanuel of Illinois, the No. 4 Democrat, is also tending to his new duties as Mr. Obama’s chief of staff.”
I’m still not sure what I would personally want the outcome of the vote to be. I agree with much of what Mish says, and I do see the Detroit automakers as, to varying degrees, painfully incompetent and having lived long past their expiry date. But I do believe that the dire situation could be used to bring about a less painful restructuring and renegotation than bankruptcy and the damage it would do to the economy and employment when it could least afford it. Had fuel efficiency measures not been neutered and postponed for so many years, and the Detroit automakers failed earlier or adapted to the now-arrived demand for fuel-sipping vehicles, perhaps we wouldn’t be faced with the sight of such a steep precipice now.
From what I have read about the labour contracts and the costs per vehicle, major concessions by UAW members, retirees and current employees, would be required for GM to build and sell small, relatively fuel-efficient cars profitably (less than a week ago I read in the Motley Fool that GM was actually losing money on each car it sold, largely due to the large commitments it had to its current and former employees. Mish’s post, which I linked to in my previous post, also mentions the UAW’s resistance to more advanced factories and processes). GM may not have been simply too stupid to build small cars, but unable to do so profitably due to the overly generous conditions of employment in the past and (to a lesser extent) present.
Nonetheless, I am shocked that prominent Democrats involved in Obama’s transition would not take the time to show up to vote for or against such an important piece of legislation. How do they rationalize that beyond by acknowledging that if they don’t need votes to keep their jobs anymore, they don’t care.
… and the cow goes moo
