Friday, December 5, 2008

Bob Corker Goes AWOL on Reason to Save Automakers

Posted By on Fri, Dec 5, 2008 at 12:31 PM

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Tennessee Senator Bob Corker is usually a cool head in Republican circles, avoiding dogma and preening partisanship in the name of pragmatics. But that apparently doesn't apply to economics.

Corker is making a name for himself as the feisty rooster of the Big Three bailout hearings, bluntly addressing Detroit CEOs in a lecturing manner they so richly deserve. But his conditions for supporting a bailout seem strictly pulled from that Workers Are Greedy Republican Playbook.

In exchange for his support, he wants the UAW to take a 40-some-percent pay cut, agree to let automakers skip payments to retiree health funds, and have the Big Three pay back bondholders at above-market rates. To which Pith responds, "WTF?"

There's little doubt autoworkers are looking at big cuts for their own survival. Few people have a problem with that--including many UAW members, who wisely note that a lesser paying job at GM is better than greeting customers at Wal-Mart. But does anyone else find it weird that Corker isn't demanding equal sacrifice from the Big Three's vast upper management ranks, whose operative motto has been Doing Our Best to Extinguish U.S. Manufacturing for More Than 30 Years? Isn't their grotesque mismanagement the leading culprit of the Big Three's demise?

Moreover, there's a very good reason automakers are contractually obligated to contribute to retiree health funds. That's because we've already witnessed--many times--what happens when you don't fund these things. (Hint: You, dear taxpayer, should start saving your pennies.) So maybe the Big Three simply don't have the money. But for a fiscal conservative like Corker, isn't this like diffusing one bomb by placing it on a timer so it'll just explode later?

And why, when workers and taxpayers have to sacrifice, does Corker want bondholders repaid at above-market rates? Could it be that Bob's real end game here is a premium payout to his friends, courtesy of you, dear taxpayer?

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