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[Congressional Record Volume 155, Number 1 (Tuesday, January 6, 2009)]
[Extensions of Remarks]
[Pages E6-E7]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

                          PERSONAL EXPLANATION

                                 ______
                                 

                         HON. PAUL E. KANJORSKI

                            of pennsylvania

                    in the house of representatives

                        Tuesday, January 6, 2009

  Mr. KANJORSKI. Madam Speaker, the American automobile industry faces 
almost certain extinction if this body fails to act at this time. I 
cannot in good conscience allow that to happen. I will therefore vote 
for this legislation today, December 10, 2008, but I do so with some 
reservations.
  Admittedly, the industry has made many missteps over the years. 
Moreover, the many flaws in this bill were probably pre-ordained by the 
expedited legislative procedures--adopted under the guise of an 
``emergency''--by which the congressional leadership chose to craft 
this bill. However, to reject this imperfect solution for an imperfect 
industry solely because it could have been better makes little sense.
  Like my constituents, I am also astonished by the actions of 
overpaid, out of touch executives at these companies. We need to pursue 
further reforms in their compensation. But if we focus today on only 
the few individuals at the top of the companies, we will lose sight of 
the larger reality: Failure to act will cost the jobs of hundreds of 
thousands of average, hardworking Americans. It would also deprive our 
Nation of an industrial sector vital for us to remain an innovative 
global leader and manufacturer in the twenty-first century.
  America needs its own automotive industry. I have always owned 
American cars. I believe in the American workforce, the thousands of 
men and women who make the automobiles on which we rely. They do not 
fly on corporate jets. They certainly do not make millions of dollars. 
We need to help them in their time of need.
  Experts estimate that if the Congress does not provide this initial 
bridge loan and the automakers do fail, 2.5 million jobs will be lost. 
The Big Three employ 240,000 workers, suppliers and dealerships provide 
800,000 jobs, and some 1.4 million jobs are dependent on the auto 
manufacturers. In my congressional district, some 500 workers at Rieter 
Automotive in Bloomsburg produce carpets for General Motors, and these 
workers and their families would experience undue hardship if we allow 
the American automotive industry to fail.
  Moreover, unemployment numbers released for November indicate this 
country lost 533,000 jobs in that month alone. The current unemployment 
rate sits at 6.7 percent. We simply cannot allow those already 
devastating numbers to swell further.
  In addition, the loss of the industry would result in a sizable drop 
in government revenue, just when annual deficits have run away and our 
national debt soars. Unemployment assistance will skyrocket and 
thousands of American breadwinners will lose their homes and even the 
ability to feed their children. The costs of inaction will therefore be 
catastrophic.
  Surely we all agree that the industry teeters on the precipice of 
disaster. Additionally, most agree that the global economic crisis 
bears a good deal of blame for the automakers' collective misfortune. 
Importantly, the industry has appropriately conceded that they deserve 
a large share of blame. They were reluctant to diversify their fleets 
of cars to suit demand and to inoculate themselves against market 
volatility in the price of oil.
  Earlier this year, consumers quickly lost their taste for large sport 
utility vehicles in favor of small, fuel-efficient cars as automakers 
for too long ignored this shift. The automakers failed to trim costs 
appropriately. They retained too many unnecessary white collar jobs. As 
we all now know, they infamously provided private jets to transport 
executives across the country, all the while paying those very 
executives $20 million-plus pay packages.
  Over the last few years, the automakers have come to recognize the 
urgency of their plight by engaging in substantive changes in their 
corporate structures. They have now presented long-term viability plans 
to the Congress, and they seem intent on getting the job done. This 
bill--if its oversight provisions are dutifully carried out by the 
Executive Branch--attempts to ensure that the necessary transformations 
occur. As a start, the automakers have expressed that wide-scale 
restructuring has already begun, and at considerable cost.
  This bill contains many thoughtful conditions. Executive compensation 
limits, taxpayer

[[Page E7]]

warrants, and a czar-like overseer are among the principles necessary 
for us to extend Federal assistance. This legislation, however, could 
have been better, tougher, and as a result more likely to succeed, if 
we had taken the time to get it right. I remain concerned that American 
taxpayer money could be used in a way that might outsource American 
jobs because the Congress did not include a specific prohibition 
preventing such an action.
  So, I question whether the oversight of the disbursement and 
allocation of all government funds is sufficiently strong. As for 
executive compensation, even though the CEOs have agreed to annual $1 
salaries, the Big Three could have been forced to pay their top 20 
executives no more than their leaner, more-profitable foreign 
counterparts are paid.
  Furthermore, we failed to establish what will occur in the event of a 
disaster scenario, in which the companies burn through this money and 
the hoped for results are not attained. We made some progress in 
planning for contingencies, but we should have done more. We could have 
created in legislation a structured bankruptcy system for the 
automakers.
  We could have also relied more on the 1979 Chrysler bailout law for 
insight and guidance. That plan included a ``certainty of success'' 
formula and required more frequent reporting. Unfortunately, this 
precedent received far less attention than it deserved. Finally, I 
believe that we ought to have considered a buy-in incentive program, 
whereby Americans would hold a vested interest in the success of these 
companies.
  Unfortunately, these and countless other potential provisions never 
saw the light of day because the Congress succumbed to the idea that 
emergencies, however real, preclude us from operating under regular 
order. The two are not mutually exclusive. I concede that the American 
automakers need money, and fast.
  But, in the three weeks it took the companies to produce at least 
reasonable viability proposals, the Congress could have considered 
numerous drafts of bills, could have held additional hearings, and 
could have marked up legislation. In addition to producing a better 
legislative product, each of those activities probably would have built 
a stronger consensus and lessened partisan discord. Going forward into 
the 111th Congress, it is my sincere hope that the Congress will return 
to regular order so that we produce better laws and establish a more 
collegial, deliberative body.
  That said, voting against this bill today simply was not an option. 
The industry might well have vanished in a matter of weeks, 
unemployment would have skyrocketed, and the economy would have sunk 
deeper. Let us hope that the money is allocated wisely, that the 
executives act prudently, that all stakeholders make some sacrifices, 
and that long-term viability is pursued tirelessly.

                          ____________________
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