WASHINGTON - President George W. Bush’s $17 billion lifeline to General Motors Corp. and Chrysler LLC means neither company will perish while he occupies the White House, yet leaves the ultimate fate of the once-proud auto industry up to the incoming Obama administration.
Little more than a month from leaving office, Bush framed his rescue as “a step that we wish were not necessary,” but one that saved the country from a disastrous economic blow.
It was also one that looked past public opposition, included a key concession of his own and spared a gridlocked Congress the consequences of its own futility.
For that he drew considerable praise from Democrats, Chrysler and GM, the distinctly more tempered appreciation of the United Auto Workers union and the scorn of fellow Republicans - all the while preserving complete freedom for his successor to start anew on Jan. 20.
Whatever the terms, targets or requirements of the loans that Bush’s Treasury Department laid out, administration officials said President-elect Barack Obama was free to change them at his will.
Because the loans were ordered by the administration, rather than mandated in legislation, the money flows first and the repayment terms are literally written on paper that the new president can rewrite. He can ease or toughen provisions in future negotiations.
Paul Bolin, sales manager at Mac Haik Dodge, Chrysler, Jeep in Temple, said the $17.4 billion in rescue loans to the Big 3 should help build confidence with the public in regards to the stability of the automobile business. And it could possibly help thaw out some frozen credit.
“Some people have been holding off (buying a car or truck) to see what would happen,” Bolin said. “It would also loosen the lending practices and give them more confidence as well.”
In a likely harbinger, the autoworkers union became first in line to seek changes.
Bush, no particular friend of organized labor, had wanted the UAW to agree to wage and benefit concessions that would make union workers equal in compensation to employees turning out Japanese cars at factories in the United States.
Sen. Carl Levin, D-Mich., objected, and Treasury Secretary Henry Paulson agreed to a change that said the compensation could be competitive, rather than equal.
Not yet satisfied, the union’s Alan Reuther said, “The UAW believes these provisions unfairly single out workers. They were not part of the agreement that the White House entered into with the Congress. We believe they should be removed.”
It’s the type of detail likely to come up again and again as the new administration tries to assure the survival of the auto industry without antagonizing organized labor, a key Democratic constituency.
“I just want to make sure that when we see a final restructuring package that it’s not just workers who are bearing the brunt of that package,” Obama said.
He didn’t say so, but some Democrats have already declared General Motors CEO Rick Wagoner must go, for example.
