The Corker plan
Posted by Richard on December 6, 2008
Sen. Bob Corker of Tennessee proposed a plan for how to bail out the "Little Three" (GM, Chrysler, and Ford) that doesn't suck nearly as much as what the Congressional Democrats and the Bush administration are talking about. Larry Kudlow had a good summary:
Mr. Corker wants a deal where, first, carmakers must restructure all their debt at some price, perhaps 30 cents on the dollar. But the bond owners must be satisfied so the government doesn’t have to pick up the tab. Second, Mr. Corker wants carmakers to get their worker-compensation levels exactly equal to those of the Japanese transplants in Detroit south. That means about $48 total hourly labor costs. GM’s labor costs were $73 in 2006, an estimated $69 in 2008, and are projected to be $62 in 2010. This, of course, includes pension and health benefits. If these two conditions are satisfied, Mr. Corker then believes some kind of government loan might be granted. We’ll have to wait and see where this thing goes.
I suspect it will go nowhere. The UAW, although they've recently offered both meaningful concessions (regarding the "jobs bank") and meaningless gestures ("delays" in retiree benefits funding), aren't about to OK significant permanent labor cost reductions, and that means all their congressional lackeys will completely ignore the Corker proposal.
But good for Sen. Corker for throwing it out there anyway. It would be nice to get an on-the-record up or down vote on this, but I'm not holding my breath.
Mo'thanskin (Roosevelt) said
RG, Senator Corker does have a good auto bailout plan. Senator Corker is a successful contractor and former mayor of a major city in Tennessee. He is proving himself to be a fiscal conservative working well across party lines. I believe he will be a good influence in Congress.
luke osaneo said
Mr corker is a real corker alright. hasn”t he been reading the papers lately. how much the the foriegn automakers be payong if they get all those incentives for building thier plants in tennesee. I don’t mind trade balance but give the domestic a level playing field.If the Japanese gov’t is subsidizing autos what is our gov’t doing for the domestics.help them out ..America take another look at the big three ,they have learned there lesson.. The foriegn makers have thier gas guzzlers too! Research and you will be surprised.. Quality price dependability you name we have matched them. The only jobs they put are manufacturing jobs.. What research and development, engineering , marketing and all the high ticket jobs are guess where. Smartin up america .. Our grandfathers are rolloing over in thier graves !!!!!!!!!!!