S10922 CONGRESSIONAL RECORD — SENATE December 11, 2008 

that gets in trouble has to be handled. 

I do not see the advantage of providing 

one special industry billions and billions of dollars bailout when we know 

this $14 billion is just the first installment. One economist has predicted it 

would be $75 billion to $125 billion before we are through. So this minimal, 

legitimate government assistance as a 

provider of debtor-in-possession financing would be a better way to do it. 

Proponents of chapter 11 for automobile companies include Luigi 

Zingales of the University of Chicago 

and Edward Altman of New York University’s Stern School of Business. 

They explain how this government supported debtor-in-possession mechanism 

operates. They note that: 

This option would be superior to a nonbankruptcy bailout because it would provide 

greater protection (bankruptcy’s ‘‘super-priority’’)— 

To the person who puts in the money 

at the end to make the company viable— 

to taxpayers, would do more to force the 

automakers to reform their operations while 

providing them greater flexibility to do so, 

and would be more likely to succeed. 

I know some ideas have been floated 

recently; that our distinguished colleague, Senator CORKER from Tennessee, has proposed that we may well 

be able to accomplish most of these 

things without going into bankruptcy. 

We are studying that. But his proposal 

has the hammer that if agreements are 

reached to modify and protect the companies from claimants, then they 

would be required to go into bankruptcy. 

One of the problems of Congress trying to fix the problem and the automakers not going into bankruptcy is a 

constitutional problem. Bankruptcy 

courts modify in part and sometimes 

invalidate in part, and entirely, portions of contracts. That is a great 

power and the Constitution provides 

for this use of bankruptcy. 

I am not sure we in Congress can pass 

a law that could invalidate contracts. I 

have argued we should go in that direction always, I hope my colleagues understand, under the belief that this is 

the regular order; this is the proper 

legal way for a company to reorganize 

itself and survive if it is in financial 

difficulties. 

We need to quit giving special privileges where they are not needed. Such 

behavior ought to be kept to the most 

narrow, special benefits outside of the 

traditional free market principles that 

have made this country great. If we 

have to go around them or violate 

them or bend a bit because of the size 

and the number of people who might be 

involved, well, let’s do so within our 

heritage as much as possible, within 

the rule of law as much as possible. I 

think that is the best way to do it. 

So I wished to share my thoughts 

with my colleagues. I would urge them, 

if they are interested in the details, to 

look into the Web site of the Heritage 

Foundation to examine what this 

bankruptcy report study shows and 

why, according to their report: ‘‘Bankruptcy Is Best.’’ I believe it is. 

I thank the Chair and also express 

my appreciation for what I understand 

to be some progress toward reaching a 

proposal we could vote on in this body 

that would be much better than the 

one that has originally been put forward by the Democratic leader and the 

White House. I do not think the President or the Democratic leader has it 

right. I think a lot of other Members of 

this body do not feel like they have it 

right. What we need to do is to do what 

we can to assist these companies 

through a very difficult period of time, 

to give them an opportunity to eliminate some of the excessive burden they 

have been carrying so that when they 

enter into the race to the competitive 

marketplace, they will be leaner and 

more efficient and more capable of 

being successful, more able to be competitive, and can restore their vigor 

and vitality. 

We have to do that, and they have to 

get out from under some of these burdens. I personally think the best way 

to do that is through bankruptcy. It 

may be that some of the work Senator 

CORKER and others have worked on can 

get us there in a slightly different way. 

I am open to that thought and certainly am desirous of a conclusion that 

could gain bipartisan support. 

I thank the Chair and yield the floor. 

Mr. President, I suggest the absence 

of a quorum. 

The PRESIDING OFFICER (Mr. 

SANDERS). The clerk will call the roll. 

The assistant legislative clerk proceeded to call the roll. 

Mr. REID. Mr. President, I ask unanimous consent the order for the 

quorum call be rescinded. 

The PRESIDING OFFICER. Without 

objection, it is so ordered. 

f 

ORDER OF BUSINESS 

Mr. REID. Mr. President, approximately 20 minutes ago the negotiation 

team broke up for purposes of having 

Senator CORKER, who has worked since 

2:30 this morning on the compromise, 

see if we could get this legislation over 

the finish line. It is my understanding 

he is making a presentation to the Republican caucus as we speak, to see if 

they will accept his compromise. 

It has been a difficult negotiation, 

principally conducted by Senators 

CORKER and DODD. Senator DURBIN has 

represented me in those meetings. 

I am hopeful we can finish this matter tonight. I do not know what the 

odds are that the Republican caucus 

will accept the work done by Senator 

CORKER and others but we should know 

soon. I am sorry it is 8:30 at night and 

people have been here—I received a call 

from one Senator who has been here 

since early this morning and wishes to 

leave and come back tomorrow. There 

are other Senators who have flights 

early in the morning to go other 

places. They hope we could finish tonight. One of those other places is 

home. They have family waiting for 

them. 

I wish I could be more dictatorial and 

say we are going to vote right now, but 

I do not have that ability. If everyone 

will be patient, we should know within 

a half hour or so if they can work 

something out. 

We are ready to go. I think with rare 

exception the Democrats understand 

this is Christmas season, that there is 

a lot of hardship out there. People are 

losing their jobs, losing their homes, 

losing their cars, and losing their patience. We Democrats believe this 

Christmas season we do not need to 

pile on. If we are not able to work 

something out, 2.5 million people are 

going to be directly impacted and millions of others will be impacted. This is 

Christmastime and I hope we can give 

the American people a gift of hope that 

we are going to wind up with an automobile manufacturing industry that 

will be stronger and more reliable. Certainly that is our desire. We hope our 

friends on the other side of the aisle, 

the Republicans, will recognize the 

good work done by Senator CORKER and 

others and finish this matter tonight. 

Mr. REED. Mr. President, I am dismayed by the turn of events that have 

occurred this evening. 

Our Nation faces economic conditions not seen in decades. By preventing action tonight on a plan to 

give the auto industry a chance to turn 

itself around, the minority is playing 

with fire. 

The jobs of countless workers, including thousands in Rhode Island, are 

on the line, at a time when we can ill 

afford more losses. Moreover, these 

companies going into bankruptcy could 

be far more costly to the federal government. And, as economist Mark 

Zandi testified before the Senate Banking Committee last week, if these companies are forced into bankruptcy proceedings, it would have a cataclysmic 

effect on our already fragile economy. 

The bill that Chairman DODD and my 

other colleagues worked on diligently 

had the potential to give the industry 

a chance to put its house in order while 

preserving jobs and protecting the taxpayers. I regret we did not have a 

chance to proceed to this measure, engage in vigorous debate, and make a 

judgment on the merits. 

Mr. McCAIN. Mr. President, I have 

been very vocal in my support of the 

U.S. auto industry and have gone on 

the record saying that we need to do 

whatever is necessary to help the auto 

industry become strong and economically viable. But we need to be realistic 

and fiscally responsible in our approach to the troubles facing this and 

other industries. I cannot support the 

proposal before us today. We simply 

cannot leave the American taxpayer 

with a tab of tens of billions of dollars 

without some serious concessions from 

the industry and some assurance of the 

domestic auto manufacturers’ longterm viability, otherwise, we are just 

December 11, 2008 CONGRESSIONAL RECORD — SENATE S10923 

throwing good taxpayer money after 

bad business decisions. 

I have great faith in the skills, energy and ingenuity of the American 

auto worker. This crisis is not their 

fault. I am committed to making sure 

that U.S. auto workers are not left to 

fend for themselves. Ours is the finest 

workforce in the world, able to compete with anyone. I stand ready to ensure that Washington does its job so 

they can do theirs. 

But simply throwing money at the 

industry is not the way to ensure its 

long-term viability or to help stabilize 

our economy. As we all have learned in 

the past few weeks, the domestic auto 

manufacturers are in much worse 

shape than we could even imagine, 

with one company, GM, announcing 

they may not survive through this year 

without Federal help. But why is it 

that Toyota sells approximately the 

same number of cars that GM does and 

is profitable? 

Clearly, the automakers will need to 

change dramatically the way they do 

business if they hope to be on course 

for long-term profitability. Rather 

than seeking an unconditional handout 

from the taxpayer, industry leaders 

must first consider how they can restructure their business models in 

order to fix the problem themselves 

and build more competitive products— 

including changes in management, renegotiating labor agreements, and reorganizing under the bankruptcy process. And, they should have been doing 

so months, if not years, ago. And if the 

bankruptcy laws need to be changed, 

then the Congress should do that. 

The automakers need to prove to 

Congress and the American people that 

they are serious about making the 

changes necessary to ensure their longterm success before they seek further 

assistance from the taxpayer. As noted 

Harvard University economics professor Martin Feldstein wrote: ‘‘the 

goal of restructuring should not just be 

to require the companies to make cars 

that are fuel-efficient and more environmentally sound . . . although that 

can be included in the government’s 

list of requirements. The goal should 

be to put companies on a course that 

will allow them to survive for the long 

term, producing cars and creating 

jobs.’’ I fully agree with Professor 

Feldstein. 

The auto industry executives, as well 

as many of my colleagues, have argued 

that bankruptcy is not an option. But 

given what we now know about their financial situation, why not? Shouldn’t 

we be considering every option possible 

to allow these companies to restructure their operations so they can keep 

people employed? Chapter 11 bankruptcy was created precisely for the 

situation in which these automakers 

find themselves—where creditors’ 

claims exceed a company’s assets. It 

may be the best option. The executives 

leading these companies have an obligation to their shareholders and employees to weigh carefully that viable 

option. 

After all, filing for bankruptcy forces 

a company to make some very difficult 

choices and the automakers would be 

no exception. The automakers would be 

forced to renegotiate collective bargaining agreements to make themselves more competitive, to eliminate 

some dealership networks and car models that are underperforming, and to 

make other difficult cost cutting decisions regarding real estate, management compensation, personnel, and 

even office supplies. It seems these 

companies may only make these difficult decisions if they file for bankruptcy. 

Additionally, bankruptcy would 

allow the cost cutting process to proceed without any political interference 

from Congress or special interests. If 

Congress provides a bailout for these 

companies, there is no doubt that legislators will weigh in when the automakers attempt to renegotiate labor 

agreements, trim dealerships in a lawmaker’s home State or eliminate a car 

model manufactured in a lawmaker’s 

district. Bankruptcy will allow these 

decisions to be made purely based on 

financial considerations and under the 

supervision of a bankruptcy judge. 

Many corporations have filed for bankruptcy and emerged better equipped to 

serve consumers and face their competitors. Bankruptcy is not an option 

that should just be written off. 

Now, I would like to mention some of 

my specific concerns about the pending 

proposal, negotiated by the Democrats 

and the White House. 

My first concern I have already discussed, the fact that the taxpayers are 

asked to foot the bill upfront, almost 

as a first downpayment, without concessions or assurances of the industry’s 

future viability. 

Another troubling aspect of this bill 

rests with the so-called ‘‘Car Czar.’’ 

Will this individual have the authority 

to invalidate contracts legally entered 

into by these companies? What in this 

legislation would prevent lawsuits 

from being filed due to nullified contracts? What is to prevent the next 

President, or the one after that, from 

firing this car czar if he or she disagrees with what the car czar seeks to 

impose? And what in the bill gives the 

American people any assurances that 

the companies or the car czar won’t 

enter into other obligations that ultimately cost taxpayers even more 

money? 

I fully agree that if we are to going 

to provide a single taxpayer dollar to 

this industry there must be very strict 

oversight in order to protect the 

public’s investment. Unfortunately, 

while this bill gives the President’s 

designee some oversight authority, it 

has no real teeth. The person appointed 

by the President would have no real 

authority to insist on the fundamental 

changes necessary to promote the corporations’ viability and protect the 

taxpayer’s investment. If we are going 

to hand over billions and billions of 

taxpayer dollars, we should at least 

consider requiring Senate confirmation 

of an individual with proven business 

leadership skills who will serve for a 

defined period of time. This would remove the possibility of the designee 

falling victim to the political pressure 

often felt by those who serve at the 

pleasure of the President—allowing 

that person to make decisions based 

solely on the best interest of the taxpayer—not on political considerations. 

Another area of concern for me surrounds what seems to me a lack of reality on the part of the domestic auto 

manufacturers. More and more Americans want to purchase energy-saving 

vehicles. Yet the domestic auto industry seems to be fighting tooth and nail 

against that reality. And if it does not 

wake up immediately, nothing Congress can do will help the industry survive. It needs to be competitive. It 

needs customers to buy its vehicles. 

And it won’t have many customers if it 

doesn’t take action to build vehicles 

with higher fuel efficiency standards 

that help our Nation end our crippling 

dependence on foreign oil. 

Finally, the bill includes provisions 

wholly unrelated to the issue at hand, 

such as language authorizing a pay 

raise for U.S. judges. Why in the world 

is it necessary to address this issue in 

this bill? I am not questioning the merits of the provision—I am sure the 

overwhelming majority of our judges 

work very hard and deserve a raise— 

but such a provision has no business 

being addressed in this manner and at 

this time when so many are doing more 

with less. This authorization should be 

addressed in the proper way by the appropriate authorizing committee. 

If we allow this $14 billion to be doled 

out to the automakers with so few conditions and no concessions—who comes 

next? And how long before they return 

seeking billions more? A recent editorial in the Washington Post noted 

that: 

the impending collapse of General Motors 

presents Congress and the President with a 

choice between two domino effects, both potentially damaging to the U.S. economy if 

the federal government does not lend GM 

money and the company goes bankrupt, the 

repercussions will spread throughout the 

country by way of the network of suppliers, 

dealers and local businesses that depend on 

GM and the other car manufacturers for 

their livelihoods. This could destroy hundreds of thousands of jobs when the economy 

can ill afford another shock. But if the federal government, frightened by these possibilities, gives GM just what it wants, it will 

be setting a precedent for even more multibillion-dollar bailouts—of automakers and of 

other troubled companies. The closure of 

DHL’s operation in Wilmington, Ohio, is 

costing 9,000 people their jobs; Circuit City’s 

bankruptcy means about 7,800 layoffs. If Detroit and its relatively well-compensated 

workforce qualify for Federal aid, why not 

these firms and workers, too? 

We need to be very careful here lest 

we slide down the slippery slope of a 

taxpayer funded bailout for every ailing business in America—large or 

small. 

S10924 CONGRESSIONAL RECORD — SENATE December 11, 2008 

Let me be clear. I am very sympathetic to the plight of the auto industry. But the proposal before us seeks to 

hand over $14 billion to companies who 

have yet to tell the Congress and the 

American people—in any detail—how 

they plan to restructure their operations and become viable in the longterm. Their gross inaction to date 

causes me great pause. And that is why 

I cannot support the measure before us. 

I am pleased to see that many are 

working hard to find an acceptable 

compromise. I am hopeful that we can 

reach a suitable agreement. 

Mr. KOHL. Mr. President, this is not 

a proud moment in America’s economic history. Our once proud automakers have come to Washington hat 

in hand asking for a loan with their future, and the future of their workers, 

at stake. In exchange for a Government 

loan they are willing to submit to intrusive Government oversight, surrender their executive perks, and give 

the American taxpayer a stake in any 

future profits. As a businessman I am 

stunned that it has come to this. 

However, I am voting for the Auto 

Industry Financing and Restructuring 

Act because I want to see the American 

auto industry succeed. Under this bill, 

$15 billion would be provided to GM, 

Ford and Chrysler in short-term loans 

that will be paid back with interest. To 

avoid bankruptcy and emerge as 

stronger businesses, this plan requires 

the big three to submit long-term restructuring plans no later than March 

31, 2009. If they do not then they will 

have their loans revoked and be 

plunged into bankruptcy. Just like 

other industries that are forced to restructure, the automakers and labor 

unions will need to make tough choices 

concerning benefits, wages and pensions to ensure their long-term viability. 

As a businessman, I am concerned 

about a Government appointed ‘‘car 

czar’’ who would have oversight and direct involvement over the operations of 

the automakers. I am worried that no 

matter how badly managed Detroit has 

been so far, a Government bureaucrat 

is unlikely to do a better job. I hope 

that whoever is found to take this difficult job has the experience, drive, and 

business savvy to help turn around this 

struggling industry. 

In the end I am supporting this bill 

because of the 46,000 well-paying jobs in 

Wisconsin that are tied to the auto industry. With the jobs report last week 

stating that the economy lost 533,000 

jobs in November alone, we can’t afford 

to put more Americans out of work. 

The Government has already begun to 

help Wall Street, now it is time to help 

Main Street. I am disappointed that we 

were not able to agree on a deal tonight. I am hopeful that a bipartisan 

solution can be reached before it is too 

late. 

Mr. HATCH. Mr. President, one of 

the most renowned former Members of 

this legislative body once said ‘‘Ask 

not what your country can do for you, 

but what you can do for your country.’’ 

With bailout after bailout, asking what 

our country can do for failing companies seems to be the norm. Today, it 

appears that our Government has become the backstop to financing private 

companies to hope for long-term viability. 

The biggest three U.S. automobile 

manufacturers, Chrysler, General Motors, and Ford, are asking Congress to 

provide a loan in order for them to 

weather a recession and give them time 

to restructure. What we need to decide 

is not whether we will assist, but how 

we will assist the troubled auto industry. While I believe there are already 

some measures in place to assist the 

automakers, it would be beneficial to 

examine whether these measures are 

sufficient. If these measures are insufficient, we should look to what can be 

done to change our system so that it 

benefits both the auto industry and the 

taxpayer. 

Most Americans are asking how the 

big three found themselves in this 

mess. The big three are victims of a financial perfect storm. Our failing economy toppled an industry that was already facing stiff foreign competition, 

mounting legacy costs, government 

mandates, and poor management decisions. 

The dramatic decline in automobile 

sales worldwide shows that the decline 

of the big three is not solely the result 

of poor management. All auto sales, 

both foreign and domestic, have declined significantly for 13 straight 

months. The sales rate last month was 

the worst in nearly 30 years, since October 1982. In November, sales declined 

at rate of 36.7 percent from the same 

month a year ago. It was also the worst 

month on record for Asian automakers. 

Legacy costs primarily refer to a 

company’s obligations from pervious 

years, such as costs the big three pay 

for health care and pensions under defined-benefit plans for current employees and retirees. Furthermore, the auto 

industry has been forced to pay union 

workers for shifts even when those 

workers are not working. It is estimated that the big three pay each 

hourly autoworker $70 an hour in 

wages and current and future benefits. 

In October 2005, a Detroit News article 

illustrated this burden. 

‘‘Ken Pool is making good money. On 

weekdays, he shows up at 7 a.m. at 

Ford Motor Co.’s Michigan Truck 

Plant, signs in, and then starts working—on a crossword puzzle. Pool hates 

the monotony, but the pay is good: 

more than $31 an hour, plus benefits.’’ 

The article further explains that ‘‘Ken 

Pool is one of more than 12,000 American autoworkers who, instead of installing windshields or bending sheet 

metal, spend their days counting the 

hours in a jobs bank set up by Detroit 

automakers and Delphi Corp. as part of 

an extraordinary job security agreement with the United Auto Workers 

union.’’ 

While the United Auto Workers have 

conceded to temporarily suspending 

the job bank and delaying payments to 

their retirement and health care funds 

for current and future employees, these 

costs have already burdened the auto 

industry. It might be too little too 

late. We need to enact measures that 

will ensure that the unions can no 

longer create unreasonable mandates 

on our auto industry. We need to ensure that these burdens do not persist. 

To overcome these burdens, the big 

three say they were already in the 

process of restructuring. Chrysler has 

eliminated 1.2 million units of capacity 

and reduced fixed costs by $2.4 billion. 

It has increased its manufacturing productivity by 32 percent over the past 7 

years. General Motors has made substantial progress in narrowing the gap 

with foreign competition in quality, 

productivity, and fuel efficiency. In 

other markets, such as China, Latin 

America and Russia, GM has grown 

rapidly and outperformed the competition. Unfortunately, our failing economy has prevented these companies 

from reaping the benefits of their restructuring. 

The normal rules of a free market 

economy dictate that if a company 

runs out of money, then the company 

must close its doors. We have already 

changed these rules by providing bankruptcy protection. In ancient Greece, a 

banker conducted business transactions on a bench. When the banker 

could no longer lend or meet his obligations, the banker would symbolically 

break his bench. A broken bench in 

Latin is referred to as ‘‘bankus 

ruptus’’, which is the origin for the 

word ‘‘bankruptcy.’’ 

It used to be that a person who became bankrupt and could no longer pay 

his debts was considered a criminal. In 

the United States, however, bankruptcy laws were established during 

harsh economic times when a mass 

amount of people could no longer pay 

their debts. Those who were willing to 

work toward repayment of debts would 

be allowed to cancel existing debts and 

be protected from creditors. In the 

1980s, an escalating number of bankruptcies inundated our courts. A ‘‘prepackaged bankruptcy’’ was developed 

to allow companies and creditors to 

submit prenegotiated bankruptcy petitions to ensure a timely and cost-effective bankruptcy proceeding. 

It appears that the big three auto 

manufacturers have severely cracked 

their bench if not already broken it. 

And now they are asking us to change 

the rules of a free market economy and 

go beyond the benefits of existing 

bankruptcy protections. They believe 

that a chapter 11 bankruptcy would 

worsen consumer confidence, thereby 

dooming them from the beginning. 

I am fully aware of the impact our 

economy could face if the big three go 

bust. It will likely trigger catastrophic 

damage to the U.S. economy, precipitating failures among component and 

logistic suppliers, other domestic car 

manufacturers, raw material suppliers, 

technology and service providers, retailers and their suppliers. According 

December 11, 2008 CONGRESSIONAL RECORD — SENATE S10925 

to a study by the Center for Automotive Research, an estimated 3 million Americans could find themselves 

jobless within a year of an auto manufacturer’s collapse. We would also lose 

enormous improvements through research and development of advanced 

propulsion investments in support of 

greatly improved fuel efficiency, emissions reductions, and energy independence. It is essential that something 

must be done to halt this impact, but 

we need to do something carefully and 

something that will ensure the longterm viability of these companies. 

I truly believe that providing unrestricted funding to the big three would 

only delay the inevitable. I believe 

that the only solution is to provide the 

resources to empower these companies 

to consolidate and restructure. The 

majority’s proposal provides temporary 

funding to allow employees, retirees, 

trade unions, creditors, suppliers, automobile dealers, and shareholders to 

come up with a plan that would be reviewed by a President-appointed designee. 

Upon review, the designee, or ‘‘car 

czar,’’ would determine whether the 

plan guarantees a viable long-term restructure, then the designee would recommend further funding. This process 

provides funding now and worries 

about viability later. While I am not a 

proponent of excessive government 

intervention, I believe that if we are 

going to provide any funding to the big 

three that it be conditioned upon reorganizing. 

This is not an unprecedented event. 

The very same issue was being discussed by the Senate in 1979 about 

whether we should provide financial assistance to Chrysler. Nearly 30 years 

ago in December, I stood before this 

body and opposed providing loans to 

Chrysler. Back then, Chrysler faced 

tough foreign competition and harsh 

economic times. The Chrysler Corporation Loan Guarantee Act of 1979 provided $1.5 billion in guaranteed loans to 

Chrysler. However, that legislation required matching private funds. 

If that amount were adjusted for inflation, it would equal more than $4 

billion today, which ironically is what 

Chrysler and General Motors says they 

need to survive until next year. It is 

also, ironically, the same amount that 

GM spent in 2007 on health care benefits for retirees and active workers. 

The bill passed in 1979 and Chrysler 

became profitable and paid back these 

loans 7 years early with $300 million in 

equity returns to the American taxpayers. So there is the possibility that 

a loan to the big three could become 

profitable for American taxpayers. But 

we should not throw caution to the 

wind. In the past 30 years, the Government has never provided a financial 

bailout to any company other than a 

financial institution besides the airline 

industry after 9/11 and Chrysler in 1979, 

both heavily unionized. 

We need to move away from becoming a government of nationalizing failing companies toward a government 

that provides opportunities for success. 

We all agree that we want to see these 

companies prosper, but we disagree 

about how we believe this should be 

done. Under the majority proposal, we 

are essentially asking each and every 

American taxpayer to invest in the future of the big three without guaranteeing that they will survive past 

March of next year. This is a risky bet. 

I believe that we can reduce the risk of 

that bet enormously by requiring the 

big three to reorganize. Simply put, 

the majority does not provide enough 

assurances that the auto industry is 

committed to reducing costs. Furthermore, their proposal requires the auto 

manufactures to enter into a chapter 11 

bankruptcy if their plan of long term 

viability is determined not to be sufficient. We all know this is a farce, because we all know that the next administration will prevent the necessity of 

filing for chapter 11 bankruptcy by giving them more money. 

My proposal calls for allowing the 

auto manufacturers and the trade 

unions the opportunity to show the 

American people that they are committed to reducing costs before the 

Government gives them any loan. Specifically, it would require that any 

bridge loan amount would be conditioned upon the amount of cost reduction concessions agreed to by management and labor. In order to receive a 

temporary bridge loan, I believe that 

these groups need to hash out a sufficient plan to show that they can pay 

back any loan amount that we provide. 

The auto manufacturers have stated 

that time is of the essence and they 

need the money at the end of the year. 

If the auto manufacturers and unions 

are really committed toward reducing 

costs, I believe that they can agree to 

a temporary plan by the end of the 

year. Time should not be an obstacle 

for Congress and the American people. 

In addition, I propose that if the auto 

industry’s plan is deemed insufficient 

that they should be forced into a binding arbitration to avoid the obstacles 

of chapter 11 bankruptcy. 

It is hard for me to believe that the 

majority is really serious about providing a solid plan. Their leadership refuses to allow us to offer amendments 

and they have now added provisions 

aimed at providing relief to municipalities, something irrelevant to the 

issue before us. 

Mr. President, we are entering the 

holiday season with our desire to assist 

the failing auto industry. While we all 

wanted to provide positive solutions, 

the most powerful deliberative body in 

the world is prohibited from deliberating one of the most pressing issues 

of our time. It is unfortunate that we 

cannot proceed in a collaborative manner. 

Mr. WARNER. Mr. President, as I 

have mentioned, GM, Ford, and Chrysler have a long and heralded history in 

our country and its national security. 

There are few in the Senate today old 

enough to remember Pearl Harbor and 

the commencement of our military operations that followed. As one of those, 

I was privileged to serve as a 17- to 18- 

year-old sailor in the last year of 

WWII. 

America was victorious in WWII because of those in uniform and those at 

home supporting them—particularly 

the industrial manufacturing base. The 

factory floor went to war. 

At this time, I would like to have 

printed in the RECORD historical information outlining the contributions the 

auto manufacturers made to America’s 

World War II war effort. 

There being no objection, the material was ordered to be printed in the 

RECORD, as follows: 

General Motors: 

With America’s entry into World War II, 

no company converted faster or more comprehensively to wartime production than 

General Motors. It has been called the greatest industrial transformation in history, 

with more than 200 plants in North America 

shifting to production of airplanes, tanks, 

machine guns, and other military vehicles 

and goods in a matter of months. General 

Motors alone supplied the US forces with 

more than $12 billion in military goods (several hundreds of billions when converted to 

today’s dollars), more than any other company. 

Ford: 

Ford Motor Company’s mass production 

know-how was one of the keys to the Allied 

victory. 

By August 1941, Ford was producing huge 

18-cylinder Pratt & Whitney aircraft engines. 

By summer 1942, Ford’s Rouge Plant was 

building 805 aircraft engines a month, while 

Pratt & Whitney’s plant was building only 

600 aircraft engines a month. In total, Ford 

built 58,000 aircraft engines during the war. 

Most notably, Ford produced the B–24 

‘‘Liberator’’ bomber at its Willow Run plant. 

With government support, Ford built the 

Willow Run plant on about 1,750 acres of 

former farmland near the village of Willow 

Run, between Detroit and Ann Arbor. All together, Ford produced about 8,700 B–24s, 

nearly half of the total built for the US military during the war. 

Ford also played a role in the success of 

the US Army Air Force glider program. Ford 

was asked to build the gliders in March 1942 

and production began that December. Ford 

eventually produced 4,400 gliders during the 

war. 

In addition, the US Government asked 

Ford to adapt its aircraft engines to be used 

in medium tanks. 

After 18 months of research and development at Ford’s expense, Ford set up a production line at the Lincoln plant in Detroit 

and began making the tank engine. Over the 

course of the war, Ford produced almost 

27,000 of these engines. 

The Army asked Ford to produce other 

tanks as well, specifically the M–4 Sherman 

tank. Ford built almost 1,700 Sherman tanks, 

including more than 1,000 M–10 tanks and almost 13,000 armored cars. 

The Army decided it needed a small, allterrain vehicle, and in 1940, Ford and Willys 

developed plans. Ford invested $4 million in 

the program and began producing the ‘‘General Purpose,’’ or ‘‘G.P.,’’ soon to be called 

‘‘jeep,’’ in 1941. There were 1,500 built by the 

spring of that year, and more than 300,000 

jeeps were built for the military over the 

next four years. 

After all of the tallies were added, the 

most important thing that Ford contributed 

was the know-how and experience to quickly 

S10926 CONGRESSIONAL RECORD — SENATE December 11, 2008 

mass-produce the vehicles, aircraft, and 

equipment which were needed to win the 

most important war in the history of the 

world. 

Ford’s precision in the machining of tools, 

and Ford’s ingenuity in designing an assembly line and making it work—these were the 

biggest guns in Ford’s arsenal of democracy. 

Chrysler: 

Chrysler’s biggest contribution to the war 

effort was its production of the M–3 tank, 

the Martin B–26 bomber, and the 40-millimeter anti-aircraft gun. By the end of the 

war, Chrysler had developed and produced 

some 18,000 tanks and supplied the Allies 

with approximately 500,000 Dodge trucks and 

more than $3.4 billion worth of military 

equipment. 

Mr. WARNER. Mr. President, hopefully, America and its Allies will never 

face conflicts that would necessitate 

the defense production of the foregoing 

magnitude. Further, the auto industrial base today, as it relates to defense 

work, is vastly reduced. 

But this base is the foundation of today’s auto industry, which could, once 

again, play a significant role in the defense of America. 

I would like to conclude with remarks from my longtime friend and 

colleague, Gen. James L. Jones, who is 

destined to be the National Security 

Adviser to President-elect Barack 

Obama: 

The financial health of the domestic auto 

industry suppliers is critical to national security. These suppliers possess unique capabilities to design and manufacture essential 

defense components should the United States 

need them. We can’t allow this critical piece 

of America’s manufacturing base to disappear. 

Mr. ROBERTS. Mr. President, today, 

I wish to offer my 2 cents on the latest 

version of the Auto Industry Financing 

and Restructuring Act, or as most Kansans call it, the auto bailout. 

As is often the case, the national debate over this issue has become more 

about perception than reality. And, unfortunately, this bill seems to take aim 

at the perception of the problem rather 

than the actual problem. 

If this body truly wanted to help auto 

manufacturers and their dealers and 

their suppliers, we would force not only 

the management of these companies to 

make tough choices but all involved, 

including their creditors and labor. 

And, Mr. President, we in Congress 

would need to make tougher decisions 

as well. 

Unfortunately, this bill offers the 

perception that concrete restructuring 

plans will be made for the companies to 

receive assistance, but reality is that 

this bill lacks the real teeth to enforce 

the type of restructuring that so many 

believe is necessary to put this industry back on its feet. 

If Congress were serious about turning the auto industry onto a path of 

profitability and stability, we would 

also need to look at our own actions 

that contributed to their current predicament. 

This was articulated quite well in a 

Wall Street Journal piece yesterday. In 

recent years, Ford, GM, and Chrysler 

made money supplying vehicles that 

consumers wanted, and in doing so 

made a profit for the companies. 

These vehicles were pickups and 

SUVs that met consumer needs. However, we in Congress decided that manufacturers shouldn’t build many of 

these vehicles. We told the manufacturers that they should build the 

smaller, less profitable, more fuel efficient cars that many Americans don’t 

want. 

If you come out to my home town of 

Dodge City, you won’t see many hybrids or little two-door cars that get 30 

miles per gallon. No, you will see Ford 

F–150s, Dodge Rams, and Chevy 

Silverados because my constituents 

need pickups for their daily lives. 

It is pretty hard to check your field 

and feed your cattle in a Prius. 

But that is the direction the Federal 

Government has pushed these automakers and continues to do so in this 

bill. We have pushed them away from 

the vehicles that turned a profit and 

created a perception of an alternate 

consumer demand. 

Another section of this bill that 

takes aim at perception rather than reality targets business aviation. The 

perception this bill creates is that business aircraft are some sort of excess expenditure. Because of the inconsiderate 

actions of three auto executives, this 

bill wants to condemn the entire business aviation industry. 

Well, as a Senator from the State 

with more general aviation production 

than anywhere else in the world, I cannot let that claim stand unchallenged. 

General aviation contributes more 

than $150 billion to the U.S. economy 

each year and employs over 1.2 million 

people right here in the U.S. 

Thirty-eight percent of the aircraft 

built here are exported, meaning the 

GA industry is one of the few remaining industries in the U.S. with a positive trade balance. Yet this bill takes 

the policy position that business aviation is unnecessary. 

If the intent of this bill is to punish 

the big three auto companies, then 

let’s really go after them. Let’s prohibit them from flying first class. You 

tell me what is wrong with flying 

coach. That is how I fly. 

Or maybe we should just prohibit 

them from flying at all. 

But that is not what this bill wants 

to do. As I have said, this bill only 

takes aim at the perception of the 

problem. It completely neglects the 

fact that companies, large and small, 

use business aircraft as a way to save 

time and money. 

Furthermore, small towns across the 

country depend upon the revenue generated by local airports serving business aircraft. 

The difficulties of the economy are 

not felt solely by the auto companies. 

Over the last 6 weeks or so, nearly 1,800 

aviation workers have been laid off in 

Wichita, KS, alone. These layoffs and a 

downturn in new orders affects their 

suppliers and parts manufacturers as 

well. 

If these 14 lines of text condemning 

business aviation become the new 

benchmark for future legislation, then 

the U.S. Congress will have put an 

American industry that leads the global marketplace at unprecedented risk. 

I understand the situation our automotive industry is facing. I don’t want 

to see layoffs or dealerships close or 

suppliers to have to cut production. 

But the reality is, whether Congress 

passes this $14 billion bailout or not, 

these things will likely happen. 

The question we elected officials 

must answer is whether or not taxpayers will see a return on their investment. 

Unfortunately, the bill before us 

today does not provide such assurances. 

I am hopeful that we can continue 

working towards a bill that provides 

the necessary reform to ensure stability for the automakers and at the 

same time protects hard-working taxpayers. 

Mr. FEINGOLD. Mr. President, I will 

support this legislation to provide financing to the U.S. auto industry because without this assistance millions 

of American jobs, and a fundamental 

part of our manufacturing base, will be 

jeopardized. In these difficult economic 

times, with unemployment increasing, 

we cannot afford to see these jobs disappear. 

I understand that many people are 

upset about this rescue package. I, for 

one, am not happy to be running up 

still more charges on the taxpayers’ 

tab. And I appreciate the arguments 

that have been made that the automakers’ troubles are of their own making. Certainly some of their troubles 

are indeed of their own making, but 

not all of them. Some of the problems 

facing domestic automakers are the direct result of policies enacted or ratified in Washington. 

The collapse of the housing and credit markets clearly hit the credit-sensitive auto industry hard, and we know 

that those problems in particular were 

not of the auto industry’s making. Far 

from it. They were the result of two 

decades of the reckless disassembly of 

a sound regulatory system, combined 

with some unscrupulous actions by 

many in the financial industry—a 

deadly combination that has now 

brought the entire economy to the 

brink of disaster including domestic 

auto producers. 

And at the same time Washington 

was repealing strong financial regulations, bipartisan majorities in Congress, led by Democratic and Republican Presidents, were also advancing 

deeply flawed trade policies which have 

further disadvantaged the domestic 

auto industry. Currency manipulation 

by foreign competitors, too, has put 

our domestic firms, including the automakers, at an enormous competitive 

disadvantage. Combine that with the 

failure of our major trade agreements 

to establish reasonable standards for 

workers, public safety, and the environment, and the self-made problems 

December 11, 2008 CONGRESSIONAL RECORD — SENATE S10927 

of domestic auto producers are greatly 

magnified. 

I will not defend the mistakes made 

by auto executives, but a significant 

amount of blame lies with Federal policymakers who blindly embraced philosophies of deregulation and trade 

that undermined protections for working families, public safety, and the environment. In fact, some of the same 

people opposed to any temporary help 

for the automakers now were the ones 

who helped dig the hole in which that 

industry now finds itself. 

More importantly, being angry at 

these companies’ past mistakes is no 

reason to permit the auto companies to 

go under at this time. To allow these 

companies to go into bankruptcy could 

prove to be a tremendous shock to our 

already weak economy and could end 

up costing the U.S. taxpayers even 

more in pension guarantees, unemployment benefits, and other costs. 

And we are not just talking about the 

jobs of the autoworkers at the U.S. 

auto plants, although those jobs are 

important. We are also talking about 

the millions of jobs in related industries including steelmakers, rubber 

companies, hundreds of other suppliers, 

parts manufacturers, car dealers, and 

other industries that would be negatively impacted if the U.S. auto companies went bankrupt. 

Workers around Wisconsin are already struggling with the downturn in 

the auto industry and would be even 

harder hit if Congress fails to provide 

assistance to the auto industry. My 

hometown of Janesville, WI, is proud 

home to the oldest GM plant and for 

over 80 years, generations of Janesville 

men and women have built cars and 

trucks for GM. The Janesville GM assembly plant has been the core of the 

community and surrounding area for 

decades by providing its workers with 

family-supporting jobs and contributing to the lifeblood of the community. Earlier this year, GM announced 

that it would cease production at the 

Janesville plant by the end of the year. 

Despite this unwelcome news, the 

State of Wisconsin and the local community, including workers, business 

owners, union leadership, have all 

come together to propose a plan to encourage GM to retool the plant to build 

a future product line. I am so proud 

that stakeholders in Janesville and in 

Wisconsin have come together to try to 

keep these jobs in Wisconsin and I will 

continue to do all I can, along with 

others in the Wisconsin congressional 

delegation, to support their efforts to 

keep an auto presence in Janesville. 

Janesville is not the only community 

in Wisconsin that is closely watching 

what we do in Congress this week. A 

Chrysler engine plant employs hundreds of people in Kenosha and various 

suppliers and related manufacturers do 

business in communities throughout 

southeastern and southwestern Wisconsin. I have also heard from auto 

dealers representing communities all 

across Wisconsin about the need to provide assistance to the U.S. auto industry to help ensure that their businesses 

continue to provide jobs in these troubling times. I understand Americans 

want businesses to be held accountable 

for bad decisions they have made in the 

past, and I do not think the Federal 

Government should get in the business 

of bailing out every industry in need of 

help. But in this case, failure to provide assistance to the auto industry 

could cause such a horrible shock to 

the American economy and communities all across our country that we 

must take action. 

While I think the Federal Government needs to act, any rescue package 

should not be a blank check and this 

particular rescue package contains 

various provisions to help ensure that 

the auto companies are held accountable for the Federal financial assistance they receive. Unlike the Wall 

Street bailout that I voted against, 

this bill provides strict rules that the 

auto companies must follow in order 

for the companies to be eligible for 

Federal assistance. The companies 

must negotiate with their employees, 

shareholders, creditors, and other parties to develop restructuring plans to 

show how these companies are going to 

reform themselves for the future, including improving their capacity to 

build the fuel-efficient vehicles that 

Americans are demanding. These restructuring plans are due within the 

first few months of 2009 and if they are 

not approved by the Federal Government, the auto companies will not be 

able to receive additional Federal funding and will have to repay the Federal 

assistance they have already received. 

I would have preferred this money to 

come from the $700 billion Wall Street 

bailout that Congress passed earlier 

this year. I am disappointed that the 

Bush administration refused to use its 

authority under the Troubled Assets 

Relief Program, TARP, to provide financial assistance to the auto companies. Congress’s investigative arm, the 

Government Accountability Office, testified before the Senate Banking Committee last week that the Bush administration currently has the authority 

under TARP to provide this assistance. 

Secretary Paulson could have acted 

weeks ago to provide such assistance to 

the auto industry, yet he continues to 

refuse to take those steps, and allocate 

what amounts to a small percentage of 

the Wall Street bailout to help millions of working families in this country. 

Because of the administration’s refusal to use its existing authority to 

help the auto industry, Congress has 

been forced to act. Unfortunately, we 

have also been forced by the administration to take money from the Section 136 Advanced Technology Vehicles 

Manufacturing Program that was created last year to provide Federal funding to auto companies and manufacturers to help them as they develop more 

fuel-efficient vehicles and related technology. This bill is far from perfect and 

one of my biggest concerns is that Congress has been compelled to raid the 

pot of money designed to help auto 

companies and parts manufacturers 

build more fuel-efficient cars in the future. Diverting the Section 136 money 

is going to further set back the work 

that the auto industry is doing to 

make their products greener and more 

marketable. 

Everyone, including the U.S. auto industry, has acknowledged that U.S. 

auto companies need to start building 

more fuel-efficient vehicles. Furthermore, all of the U.S. auto companies 

have applied for loans under Section 

136 and access to the Section 136 retooling funding is critical to their future 

success. Yet today we are taking this 

retooling money to pay for the shortterm survival of these companies. This 

was a false choice and if the administration had been more willing to work 

with us on this issue, we could have 

done both. Instead, by taking from the 

Section 136 program today we are engaging in extremely shortsighted policymaking. I will work with my colleagues to help ensure that funding for 

Section 136 is reinstated next year. 

I regret that we find ourselves in this 

position today. I thank Senators 

LEVIN, STABENOW, and DODD and their 

colleagues in the House of Representatives for putting together this legislation in very difficult circumstances. 

This bill is not perfect, but given the 

need for prompt action, I will support 

it and I urge my colleagues to do the 

same. We must act in order to help protect millions of American jobs from 

disappearing and to help prevent 

countless communities in Wisconsin 

and around the country from experiencing even more economic hardships 

in the short term. As the new Congress 

gets under way shortly, I look forward 

to helping develop longer-term policies 

to assist American industry as it responds to 21st century challenges so 

that it can continue to lead the world 

in innovation. 

I suggest the absence of a quorum. 

The PRESIDING OFFICER. The 

clerk will call the roll. 

The assistant legislative clerk proceeded to call the roll. 

Mr. REID. Mr. President, I ask unanimous consent that the order for the 

quorum call be rescinded. 

The PRESIDING OFFICER (Mr. 

TESTER). Without objection, it is so ordered. 

f 

AUTOMOBILE INDUSTRY CRISIS 

Mr. REID. Mr. President, to all those 

within the sound of my voice, we have 

tried very hard to arrive at a point 

where we can legislate for the automobile industry. People have worked 

very hard. I believe everyone is working in good faith. I am terribly disappointed that we are not able to arrive at a conclusion, but I want to say 

in the most emphatic manner how 

much I appreciate Senator CHRIS DODD. 

He has worked going into months now.