Please see below for an update from Republican Senate Leader Mitch McConnell talking about Sen. Voinovich’s efforts to help the auto industry this morning on the Senate floor:WRONG!
“So let me suggest a bipartisan path forward that has not yet been offered by the majority. It’s a compromise being worked on by Senators Voinovich and Bond which repurposes funds already appropriated by this Congress to fund a $25 billion loan program for automakers to build advanced technology vehicles—coupled with new taxpayer protections and federal oversight of how the money is spent. This is a proposal which I believe has support from both sides of the aisle, and that actually has the potential to pass right now—not next year.
“There is a way forward that will help protect the jobs in the auto industry, while also protecting the taxpayers. Senators Voinovich and Bond are working with colleagues across the aisle to protect taxpayers and our long-term economic health. Should this compromise approach be approved by the Congress, it is the only proposal now being considered that has a chance of actually becoming law.”
The Senate is streaking down the wrong path at ludicrous speed. This 'solution' doesn't address the primary issue at hand: The Big 3 American auto companies are practicing failing business practices. Providing them a loan to increase their R&D simply delays the inevitable failure of the companies and puts taxpayers in a deeper hole. The fact of the matter is that the auto industry is burdened by obnoxiously high labor/retirement costs. Until that issue is addressed, these companies are doomed.
Sometimes filing for Chapter 11 bankruptcy is a good thing. In this case it would help get rid of or reform the unions as well as company management in this industry that has refused to change the way they do business in the face of a great spiral of economic doom.
As for "federal oversight of how the money is spent"...there is only one way to address that one: