Sen. Bob Corker on auto bailouts: ‘I was right’
January 11, 2011 http://detnews.com/article/20110111/OPINION03/101110350
Sen. Bob Corker on auto bailouts: ‘I was right’
The last time we saw Bob Corker around here, the Republican senator from Tennessee was walking the floor of the North American International Auto Show as “Public Enemy No. 1.”
Or so he acknowledged two years ago, when the wounds of national humiliation from federal bailouts still were raw at General Motors Co. and Chrysler Group LLC — both now well on the road to financial recovery.
There he was again Monday, glad-handing folks in front of the new Volkswagen Passat sedan the German automaker plans to assemble in a brand-new, presumably non-union, plant in Tennessee. Gone was the media horde. I walked up and simply asked whether he was wrong about Detroit.
“I actually say I was right,” he said, smiling. “If you look at where GM was at the time, there was no way they could survive. If you look at the balance sheet of GM, it’s totally different” now. “I’m excited about GM’s future.
“You have never heard Bob Corker ever, ever, ever criticize the product,” he added, proclaiming ownership of a Chevrolet Tahoe, a GMC Yukon hybrid SUV, a VW Touareg and a Ford van for his interior-designer wife. “The criticism I had was with the structure of the company.”
That, and more. In hearings of the Senate Banking Committee two years ago, the former mayor of Chattanooga verbally depantsed the CEOs of GM and Chrysler, telling Chrysler’s Bob Nardelli that he wanted “to hang around long enough so you can … hopefully get married before you run out of money.”
The Tennessee senator, joined by Alabama Sen. Richard Shelby, R-Toyota, emerged as arch-enemies of Detroit and the United Auto Workers. They slammed broken business models, ridiculed the indefensible jobs banks and hammered away at the wage-and-benefit premiums Detroit’s automakers paid to their UAW work forces.
They blamed inept management, lackadaisical boards of directors and grasping union leaders, whose accelerating demands contributed to the fixed costs that conspired to crush the companies when sales tanked, oil prices skyrocketed and credit markets seized.
They had valid points — to a point. Not because Corker says so, for one, but because the four-point plan he pushed as conditions for a federal bailout essentially underpinned the workouts pushed by President Barack Obama’s auto task force and executed by new management teams at both companies.
Call it what you want, but that looks like vindication for a Southerner whose proposed solutions were considered the legislative equivalent of rancid castor oil and hated in return.
Force bondholders to take “haircuts” to help GM reduce its debt load? Check, thanks to bending the bankruptcy rules (in favor of the UAW). Push the UAW to accept a portion of retiree health care obligations in company stock? Check. Align total labor costs with those paid by non-union, foreign-owned automakers operating in the south? Check. Kill the jobs bank? Check.
And what did Detroit get in return?
A GM that had booked more than $4 billion in profit through the first nine months of last year and is expected to book its first full year of profitability since 2004. A Chrysler whose operating profit last year exceeded $700 million and could hit $2 billion this year, CEO Sergio Marchionne said Monday.
We get a UAW whose new president, Bob King, is declaring dead the era of confrontation, high fixed costs and sclerotic work rules. Detroit’s hourly labor costs today, executives say, are within a few dollars per hour of those paid by Toyota in Kentucky and Nissan in Tennessee, among others. And shifts are being added to plants in Michigan, Ontario and Ohio.
We even get added benefits to Ford Motor Co., whose bailout-free bootstrap restructuring benefitted from the savings GM and Chrysler wrangled from the UAW. Corker calls CEO Alan Mulally “one of my heroes.”
And we get confirmation, whether Corker and the auto task force hotshots want to admit it, that Chrysler and, especially, GM had businesses worth saving because they had credible cars and trucks that could compete with the best. Because they are, right now.
Which is not to say the Tennessee senator’s enthusiasm for a rebooted Detroit is boundless. What about the UAW’s public plan to target foreign-owned automakers — including several in his state — with union organizing campaigns, I asked.
“I can’t imagine any company wanting the UAW to be part of their company,” he replied. “It’s the employees who decide. My sense is they will view their economic self-interest (being) better served by not being affiliated with the UAW.”
Maybe, maybe not. But Corker’s call, tough as it was to hear in the dark days of November and December of 2008, ended up presaging the solution that came later. Few pols from either party in Washington could lay claim to that.