GM, Ford and Chrysler dealers in the Chattanooga area appealed to Congress Wednesday to provide relief for America’s automakers during what is shaping up as the biggest economic downturn in a generation.
But most southern Senators continued to resist pleas for any immediate help for Detroit. U.S. Sen. Bob Corker, a Chattanooga Republican who serves on the Senate Banking Committee, said UAW union contracts that pay laid-off workers most of their base pay are unreasonable in the current economy.
“I find it very difficult that you’d be in here asking us for $25 billion, which we know is just the beginning, when you have an agreement in place like that (with the UAW) that causes you to have to pay 95 percent of the workers that are not working,” Sen. Corker told auto and union leaders during a Senate hearing this week.
U.S. Sen. Lamar Alexander, R-Tenn., said he believes the energy requirements of an earlier $25 billion loan commitment to the auto companies for retooling should be lifted to make short-term aid to the Big 3 available now.
U.S.-brand dealers, who collectively employ 740,000 workers in the United States, worry millions of Americans could be hurt if one of the Big 3 auto makers don’t get any help and end up filing for bankruptcy.
“What’s good for General Motors is still what’s good for America,” said Jim Gentry, a Kimball, Tenn. GM dealer who owns the oldest continuously operating car dealership in the area. “Without some help for our auto industry, I think the economy of the United States will crash.”
Mr. Gentry questioned why U.S. Sens. Bob Corker and Lamar Alexander won’t do more to help American car companies when they supported millions of dollars of government aid for Nissan to locate in Smyrna, Tenn., in the 1980s and more than $1 billion of local, state and federal assistance and tax relief over the next 30 years for Volkswagen to build an assembly plant in Chattanooga.
To help develop the Enterprise South industrial park for VW, Congress has funded more than $24 million of federal appropriations for roads and worker training.
Clay Watson, president of Mountain View Ford in Chattanooga, said Uncle Sam needs now to provide some temporary assistance while the Big 3 U.S. car makers adjust to a changing economy. If one of the Big 3 files for bankruptcy, many automotive suppliers, dealers and consumers could be hurt and an already fragile economy will suffer even more.
“I’m afraid a lot of people would be cautious about buying from a bankrupt company,” Mr. Watson said. “As dealers, we’ve invested our hearts and souls in our businesses and we feel like we’ve done a good job but we are the ones that will be penalized if Congress doesn’t provide some kind of assistance.”
In a full-age advertisement in Wednesday’s editions of the Times Free Press, Chevrolet dealers said more than 3 million jobs are in jeopardy if America’s automobile industry doesn’t survive and losses for federal, state and local governments could reach $156.4 billion over the next three years if the Big 3 don’t survive.
While none of the dealers interviewed for this story pounded the hallways of Capitol Hill, others went to Washington to lobby their representatives.
“I truly believe at Ford that we have better vehicles than we ever have before, but unfortunately any turnaround takes time and we’re having to operate in a very tough credit market right now,” Mr. Watson said. “The money that the Treasury Department has given these banks has not loosened even one cent any kind of lending at all, so we have to continue to fight to get financing for people who want to buy what we are selling.”
Chattanooga Cadillac and GMC dealer Tim Kelly said he fears that a Chapter 11 bankruptcy filing by GM or Chrysler could quickly slide into a bankruptcy liquidation “because of the complexity of the automotive supply chain and consumer concerns about buying a car from a bankrupt company.”
“If we can get the capital markets back to normal, there is a lot of pent-up demand for new vehicles and we can recover, but the manufacturers need some short-term assistance,” Mr. Kelly said. “The Japanese and German carmakers have had government help with paying health care and other employee programs for years while American companies have had to keep running with that weight on their back.”