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Friday, Jul 10, 2009
Why did a small group of Southern Republicans turn the auto bailout into a demolition derby? Introducing the senators who hate unions and love foreign cars.
By Alex Koppelman and Mike Madden
Read more: Alabama, Politics, Labor, News, Tennessee, Economy, South Carolina, Cars, Alex Koppelman, Mike Madden
Dec. 13, 2008 | WASHINGTON -- 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.
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