On July 15, Bob Corker was a happy man.
“I cannot think of a more exciting day, even more so than Election Night, for me,” the Republican senator from Tennessee said in a conference call that day. The reason for his elation was the announcement that Volkswagen, lured by up to $500 million worth of incentives from the state government, had agreed to build a $1 billion plant near Chattanooga, Tenn. That is, not just in his home state, but in the suburbs of the city he once served as mayor.
Add VW to Nissan, which already has two plants and its North American headquarters in Tennessee, and you begin to see why Corker was so aggressive this month about trying to block — or at least dramatically rewrite — a proposal to float billions of dollars in emergency loans to domestic automakers. Most of the focus during this debate has been on lawmakers who represent Michigan, the home of the Big Three — Ford, General Motors and Chrysler. But Corker represents the other side of the coin: Tennessee and other Southern states have recently come to depend on foreign automakers and their non-union factories. If you’re from those parts, what’s good for American car companies may no longer be what’s good for the country — because your economy now depends on their foreign competitors instead.
The fiercest opposition to the loan proposal — and nearly a third of the 35 votes against ending debate on the deal — came from Southern Republicans, and the ringleaders of the opposition all come from states with a major foreign auto presence. Not coincidentally, nearly all of those states — except Kentucky — are also “right-to-work” states, which means no union contracts for most of the employees at the foreign plants. The Detroit bailout fell victim to a nasty confluence of home-state economic interests and anti-union sentiment among Republicans.
This week Southern Republicans had a chance to go to bat for foreign automakers while simultaneously busting a union. At a hearing last week, Corker explained that his constituents “have a tough time thinking about us loaning money to companies that are paying way, way above industry standard to workers.” Which may explain why his proposed alternative to the loan agreement between Congress and the White House would have required the United Auto Workers to agree to significant wage cuts next year, based on a spurious claim that union workers earn significantly more than non-union workers.
Even George W. Bush’s White House didn’t push to crush the UAW the way Corker and his buddies did, say Democrats involved in the negotiations with the administration. “It was all about the unions,” one senior Democratic aide said. “This is political payback for lots of things, and probably even more to come.” Labor officials expect Republicans to keep taking shots at unions whenever they can. “This cynical stance they took last night — they’re willing to jeopardize 3 million jobs so they could gain some advantage in their war against unions — is appalling,” said Bill Samuel, the chief lobbyist for the AFL-CIO.
As the Republican Party consolidates in the South, the fight this week could turn out to be a preview of many battles to come over Barack Obama’s economic plans. If those plans involve the domestic auto industry, the GOP pushback will come from somewhere down I-65, the new auto corridor that runs from Kentucky south to Alabama. Expect to hear more not just from the very vocal Bob Corker, but from the rest of a core group of Southern senators whose bread is buttered by the Japanese, Germans and Koreans. Here’s a guide to the major players.
Richard Shelby, R-Ala.
Foreign auto plants: Mercedes-Benz, Hyundai, Honda
Domestic auto plants: None
Campaign cash from car companies: Not much, apparently — they don’t rank among the top 20 contributors to his campaigns over his career.
What drives him: Shelby is the top Republican on the Senate Banking Committee, which had hearings last week on the bailout. He basically thinks Detroit is doomed. “Unless Chrysler, Ford and General Motors become lean and innovative and competitive in the marketplace, this is only delaying their funeral,” he told reporters on Wednesday. “I want them to survive, but they have to make that decision. They can strip down. They can become competitive. They could save thousands and thousands of jobs.” He said he’d feel the same way if he had domestic plants in Alabama: “If I had five G.M. or Ford plants in my state, I would oppose this bailout.” But since he doesn’t, opposing it is probably a little easier.
Jim DeMint, R-S.C.
Foreign auto plants: BMW
Domestic auto plants: None
Campaign cash from car companies: More than $210,000 over his career, though the industry doesn’t rank among his top donors.
What drives him: DeMint loves to go on TV to spout whatever talking points conservatives want to hear, and the Detroit bailout was no exception. Here he is on Fox Business Network on Thursday, comparing the contracts in union car plants with those in non-union factories: “The take-home pay is essentially the same, but gold-plated benefits that the unions have negotiated over the years have essentially brought the Big Three to the brink of bankruptcy. And they will freely admit that the American auto companies that are producing overseas are very competitive, because they don’t have to operate under the union agenda.” A true believer, DeMint seems more motivated by a desire to crush the UAW than to help out the BMW plant in his home state — though that probably doesn’t hurt, either.
Mitch McConnell, R-Ky.
Foreign auto plants: Toyota
Domestic auto plants: Ford and G.M.
Campaign cash from car companies: As Senate Republican leader, and one who faced a tough reelection bid this year, McConnell gets tons of money from just about everyone. But he ranked fifth on the list of recipients of auto manufacturing money this cycle, getting $40,050, including $8,000 from G.M.
What drives him: McConnell is keenly aware that the conservative base is revved up to fight labor. Unlike every other state with major auto manufacturing in the South, Kentucky has no right-to-work law — and the UAW already represents workers at the Ford and G.M. plants, and may make a play to organize Toyota workers, too.
McConnell participated in the Senate negotiations, but, like Corker, has pretty major home-state ties to Detroit’s competitors. (He also wouldn’t mind breaking the UAW, so it stops sending anti-GOP mail to its members in Kentucky.) McConnell started the bailout’s death spiral Thursday, when he announced he wouldn’t support the version that passed the House, and then let Corker take the lead on further negotiations. “The administration negotiated in good faith with the Democratic majority a proposal that was simply unacceptable to the vast majority of our side because we thought it, frankly, wouldn’t work,” McConnell said on the Senate floor after the vote that killed the deal, in a speech that was basically just a public love letter to his fellow Southerner. “Into this breach stepped the junior senator from Tennessee who, I must say, has made an extraordinary impact in a very small amount of time.”
Bob Corker, R-Tenn.
Foreign auto plants: Two Nissan plants, as well as the company’s U.S. headquarters; Volkswagen will open near Chattanooga in 2011
Domestic auto plants: G.M. (though the company announced Friday that that plant will close until February)
Campaign cash from car companies: $234,860 for his career, including $194,800 during his 2006 campaign — more from the automotive industry than any other candidate, including incumbents
What drives him: Automakers are surprisingly important to Tennessee’s economy — the state now ranks fifth in auto-industry jobs. Foreign car companies, and suppliers, play an important role in that. And the number of auto jobs will be increasing soon, thanks to Corker’s efforts. As mayor of Chattanooga, he reportedly conceived the idea for the site that will soon become home to the Volkswagen plant, and was instrumental in its development. He organized efforts to lure Toyota to the area, and when that failed, he had VW execs and other top state politicians over to his house for dinner. He’s said the plant, which will employ an estimated 2,000 people and could lead to the creation of another 2,000 related jobs, “will take us to levels we can only begin to imagine.”
On the other hand, Corker hasn’t seemed particularly concerned about the potential demise of American car companies — or, at least, certainly not about the prospect they’ll be forced into bankruptcy. In fact, his plan specifies that if the automakers don’t meet any of his conditions, that failure “will result in the requirement that the company file bankruptcy under Chapter 11.” He’s been particularly blunt about his assessment of Chrysler: “In Chrysler you have a company that is not going to survive as a stand-alone. It’s not going to happen,” he said in one recent interview. In the meantime, he’s been talking up the companies that operate in his home state. In an Op-Ed for the Detroit Free Press, Corker didn’t just call for UAW members’ wages to be cut so that they’re on the same level as the pay at the foreign companies’ U.S. factories; he specifically said he wanted wages brought “immediately in line with companies like Nissan and Volkswagen.”
Of course, the influence of most politicians’ traditional motivation can’t be discounted either. In a party that’s lost in the wilderness, unsure of who will guide it in the future, Corker has emerged as a leader on this issue, successfully fighting for a position that’s popular with the GOP’s base and its opinion leaders.
While Corker and DeMint pushed hard against the bailout, their colleagues, Lamar Alexander and Lindsey Graham, didn’t even vote on it. But it wasn’t evidence of a split among Southern Republicans — Alexander was home recovering from back surgery (and opposed the bailout), and Graham had also made clear that he opposed the deal. It wasn’t clear why he didn’t vote.
Georgia’s two Republican senators, Saxby Chambliss and Johnny Isaakson, both voted against the plan as well. Their state has a big Kia factory coming in soon.
Meanwhile, four Democrats voted against the loan proposal — including Majority Leader Harry Reid of Nevada. Reid didn’t actually abandon Detroit, though; he voted against the deal for procedural reasons, giving him the power to call for a new vote later (which senators can only do if they were on the side that won). Montana’s Jon Tester and Max Baucus opposed the bill because it allowed tax shelters for public transit companies, which that state doesn’t have many of. And Arkansas Sen. Blanche Lincoln said she voted no because she wanted money from the existing financial bailout to be used instead of new funds — which is now the only way Detroit will get any help.
– Additional research by Vincent Rossmeier and Gabriel Winant