State and national labor leaders criticized Sen. Bob Corker, R-Tenn., Friday for his hard-line stance in auto bailout negotiations while supporting government incentives to develop a foreign automaker in his hometown.

In a news conference, United Auto Workers President Ron Gettelfinger questioned the senator’s unwillingness to back a federal loan plan after he had helped negotiate hundreds of millions of dollars in state and local incentives to lure German-based Volkswagen to build a plant in Chattanooga.

“They use taxpayer dollars to subsidize our competition,” Mr. Gettelfinger said.

Sen. Corker said in an interview it was the UAW’s unwillingness to compromise on what he called “flexible” concessions that prevented a deal from happening. He said he asked labor leaders to commit to wage and benefit cuts by some time in 2009, but UAW officials would not budget from their proposed date of 2011.

“I wanted to make a deal,” Sen. Corker said. “All we wanted was, ‘Look, just tell me when. Give me a date.’ That was not possible to get to.”

Sen. Corker, a former Chattanooga mayor, countered criticism of his support of VW by noting that General Motors also received government incentives for its plant in Spring Hill, Tenn.

Mike O’Rourke, president of UAW Local 1853 at the GM plant in Spring Hill, Tenn., accused Sen. Corker of “playing politics and risking the jobs of 110,000” people related to the automobile industry in the Volunteer State by opposing a $14 billion loan plan approved Wednesday in the U.S. House of Representatives.

The package was meant to address severe economic distress that could lead two of Michigan’s Big Three — General Motors and Chrysler — to bankruptcy in weeks. Officials at the third major automaker, Ford, have said their company’s situation is not as dire.

The Senate voted that plan down Thursday after the negotiations on Sen. Corker’s alternative proposal collapsed.

Area dealers respond

Local auto dealers noted that foreign automakers can’t flourish without stability in the domestic carmaking business.

“If either (GM or Chrysler) were forced to close, their volume that they buy from suppliers would affect the suppliers so much that he would have to (make cuts), and that would affect even the imports,” said Herb Adcox, owner of Herb Adcox Chevrolet in Chattanooga.

Mr. Adcox said he was encouraged to hear White House officials announce Friday that they are considering using some of the $700 billion Wall Street rescue package to help automakers. He said the automakers don’t need a “bailout” per se — just a temporary loan.

Clay Watson — who is president of Mountain View Ford Lincoln Mercury and whose family owns several other dealerships in town, including one that sells Chevrolets — said he remains optimistic, both for his sake and the nation’s, that a deal can be reached.

“I think some sort of plan will shake out,” Mr. Watson said.

Rick Ezell, general manager of Justin Dodge Chrysler Jeep Mitsubishi in Calhoun, Ga., said stipulations are necessary.

“I think the bailout has to happen, but I agree with Congress that you can’t just turn the money loose without protecting it,” he said.

“Apples to Oranges”

Local and state officials said Tennessee maintains deep ties with the auto industry and has good relations with domestic and foreign carmakers and their suppliers.

State Economic and Community Development Commissioner Matt Kisber said Gov. Phil Bredesen and administration officials have “worked closely with GM over the years” and noted the state has put a “significant amount of resources into helping retrain the GM work force in Spring Hill.”

The state recently has spent about $35 million retraining GM Saturn plant workers, the commissioner noted.

Chattanooga Mayor Ron Littlefield said comparisons of the VW incentives to the proposed industry bailout are an “extreme example of comparing apples to oranges.”

“What we are providing is a relatively small amount of incentives compared to the billions requested by the whole industry,” he said. “When Volkswagen first came up, we were at the Detroit auto show looking for any automaker that was shopping for a site, and we would have made similar offers to any company.”

VW spokeswoman Jill Bratina said the company is supportive of a bailout, and she added that the state support it is receiving will help the economy as a whole.

“The state’s co-investment with us ensures the success of (our) efforts, which will ultimately translate into more than 11,500 jobs in the area, $12 billion in new economic activity for the state and more than $1 billion in new tax revenues over the life of the project,” she said.

WHITE HOUSE PLAN

White House press secretary Dana Perino said the administration is willing to consider all options, including use of the Wall Street rescue funds, to prevent the automakers from going under.

“A precipitous collapse of this industry would have a severe impact on our economy, and it would be irresponsible to further weaken and destabilize our economy at this time,” she said.

Sen. Corker said he hopes that if Treasury Secretary Hank Paulson taps into the $700 billion for an auto bailout, the loan would come with the same covenants he developed in his alternative proposal.

In addition to the union wage concessions, Sen. Corker’s three-point plan called for the Big Three to get their bondholders to agree to swap the debt for equity and change payments to a retiree health-care trust so half the payments would be in stocks.

Sen. Corker said those covenants are the only way to force the Big Three to restructure to remain competitive.

“Is it a better deal for the UAW if these companies limp forward, continue to close plants, lay people off (and) lose market share?” Sen. Corker asked.

Sen. Lamar Alexander, R-Tenn., missed the Thursday vote after having back surgery in Tennessee but would have voted against the House bailout bill, spokesman Lee Pitts said.

“Government involvement may have some role in the solution here, but putting a government that can’t run itself very well in charge of running big car companies makes no sense,” Sen. Alexander said in a statement.

Sen. Johnny Isakson, R-Ga., voted against the bill, as did Sen. Saxby Chambliss, R-Ga., and said he hopes the Wall Street rescue package is not used to help the automakers.

“This program must remain dedicated to easing the credit markets, which will allow the markets to work and will help consumers regain confidence,” he said.

Staff writers Dave Flessner, Andy Sher and Andy Johns contributed to this story.

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