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Auto hearing takes some strange turns

July 28, 2009

Auto hearing takes some strange turns


Just as it is not appetizing to watch the act of sausage being made, it is not pretty to witness either a bankruptcy process or a congressional body in action.

On Monday at Wayne State University, it was with some trepidation that I sat in on the Congressional Oversight Panel’s field hearing looking into the hurry-up bankruptcies of General Motors and Chrysler.

It was, from the get-go, fairly strange stuff. U.S. Rep. John Conyers, D-Mich., welcomed the panel by wondering aloud whether President Barack Obama’s administration is trying to start a takeover of the private sector.

Odd, I thought. Isn’t Conyers on Obama’s side?

Not to worry. Soon U.S. Rep. Jeb Hensarling, R-Texas, a member of the panel, played to type as the GOP attack dog, ranting that the Troubled Asset Relief Program was intended only for stricken financial giants and not auto companies.

And he took an obligatory shot at labor by slamming UAW President Ron Gettelfinger for not attending Monday’s hearing, after earlier asking for help for the auto companies. "Now that he has received it, it appears that neither he nor his representatives can be found to help account for these funds," Hensarling said.

Tough guy, taking a swipe at the guy who’s not in the room.

Standing up to scrutiny

The main event Monday was the testimony of Ron Bloom, head of Obama’s auto industry task force.

Elizabeth Warren, a Harvard law professor and head of the oversight panel, asked Bloom why banks that got TARP money didn’t face the restrictions placed on GM and Chrysler.

Bloom said he was only working on autos and couldn’t compare them with the financial outfits.

"I’ve had my hands full trying to wrestle with two very large troubled auto companies," he said. "That takes up 21 hours of the day."

Hensarling asked Bloom if it’s wise to have a subsidized GM and Chrysler competing with Ford Motor Co.

Bloom calmly replied that Ford chose not to ask for aid and has publicly supported the loans for GM and Chrysler.

And so it went, for three hours, until Warren ended the ordeal by shredding Richard Mourdock, the hapless Indiana state treasurer.

Mourdock claimed his state’s retirees got cheated because their pension funds were granted only 29 cents on the dollar in Chrysler’s bankruptcy for their secured debt. But when Warren asked Mourdock how much Indiana paid for the debt, he conceded it was 43 cents on the dollar.

Mourdock soon sheepishly admitted the Chrysler debt was cheap to begin with because it was risky and everyone in the market knew that.

There’s a lot of high-minded talk about federal intervention, but up close it’s about scrapping for a few bucks amid the misfortune.

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