Bad Bailout Backlash

Thirty-six members of the U.S. House -- Democrats and Republicans,
liberals and conservatives -- recently wrote to President Obama asking
him to stop the White House Auto Task Force from taking actions that
are harmful to American autoworkers, auto dealers and the states and
communities impacted by plant and dealership closings.

Congressman Dennis Kucinich, D-Ohio,
organized the effort with Ohio Republican Steven LaTourette in response
to the administration's approach to the Chrysler bankruptcy and
bailout.

But it now takes on new significance as the administration's approach
to the General Motors bankruptcy and bailout -- a much larger endeavor
-- parallels the bad strategies of the Chrysler deal.

Here is the text of the Chrysler letter, which was sent late last month:

The Honorable Barack Obama

The President

The White House

Washington, DC 20500

Dear Mr. President:

We are writing to express our concern over events that have occurred
and will soon occur in the U.S. Automobile Industry. We are grateful to
you and your Administration for the leadership demonstrated. However,
decisions being made by the Auto Task Force and in the bankruptcy
proceedings in New York are more than troubling.

In your announcement on Chrysler on April 30, 2009 you indicated
that: "It will not disrupt the lives of the people who work at Chrysler
or live in communities that depend on it."

While we know that was your intention, events following your announcement have made that impossible.

Specifically,

1.) Members of the UAW voted on April 28-29 to ratify a contract
agreeing to significant concessions. Sadly, approximately 9000 auto
workers at 8 Chrysler facilities went to vote on that contract without
knowing that their jobs would be terminated. For example, 88% of the
members of Local 122 in Twinsburg, Ohio voted on April 29th for the
agreement, celebrated your announcement on April 30th, and discovered
for the first time that their plant would be shuttered on May 1st;

2.) As part of the bankruptcy proceedings, those 9000 workers have
been given to only May 26th to determine if they want to accept a buy
out package terminating all rights of their employment;

3.) On May 4th in those bankruptcy proceedings, Robert Manzo of
Capstone, Chrysler's consultant, testified that the Auto Task Force,
after first suggesting that Chrysler not be permitted to spend any
funds on advertising, begrudgingly agreed to permit them to spend half
of their advertising budget;

4.) In those same proceedings, 789 Chrysler dealerships have been
slated for closure. It is anticipated that up to 2300 GM dealerships
will soon receive the same news. As you know an average of 60 people
work in each dealership in the U.S. The result of direct job losses,
without any factoring in of the supply chain, will approach 150,000.

As you will recall in 1979, the Carter Administration, when faced
with the pending insolvency of Chrysler, worked with the Congress to
create the Chrysler Loan Guarantee Act of 1979. That legislation
recognized the Congress' Constitutional responsibility to receive and
refer observances from all stakeholders. The 1979 legislation received
broad bipartisan support and public acceptance because decisions were
thoughtfully made by the nation's elected leadership rather than by a
non-elected task force.

While we are mindful that time is of the essence, we are
respectfully requesting that you return the Auto Task Force to its
important advisory role to you and your Administration, but also return
the Congress' Constitutional legislative prerogatives before it further
disrupts the lives of people who work at Chrysler or live in
communities that depend on it.

Signers of the letter included: LaTourette, Kucinich, Don Young (R-AK);
Jesse Jackson, Jr. (D-IL); Pat Tiberi (R-OH); Tom Latham (R-IA; Glenn
Thompson (R-PA); Mike Simpson (R-ID); Frank LoBiondo (R-NJ); Brett
Guthrie (R-KY); Tom Cole (R-OK); Thad McCotter (R-MI); Judy Biggert
(R-IL); Jo Ann Emerson (R-MO); Adrian Smith (R-NE); Jim Gerlach (R-PA):
Paul Ryan (R-WI); Bob Latta (R-OH); Kenny Marchant (R-TX); John Duncan
(R-TN); Lee Terry (R-NE); George Radanovich (R-CA); Neil Abercrombie
(D-HI); Louie Gohmert (R-TX); Dennis Rahberg (R-MT); Geoff Davis (R-KY)
Greg Walden (R-OR); Mike Pence (R-IN); John Conyers (D-MI); Mike Turner
(R-OH); Mike Michaud (D-ME) Pete Sessions (R-TX); Dan Burton (R-IN);
Shelley Moore Capito (R-WV); Devin Nunes (R-CA); and Pete Visclosky
(D-IN).

Laura Flanders hosted Kucinich on GritTV
Thursday for a discussion of the Obama administration's plan to make a
federal investment of as much as $50 billion in General Motors at the
same time that the company is preparing to shut as many as 20 U.S.
factories and lay off as many as 20,000 workers. GritTV
is always worth watching, but this is especially important programming,
as most of the national media is strugging to catch up with this story.

The planned factory closings and layoffs are part of a broader plan
to offshore much of the manufacturing capacity of GM to foreign
countries.

Kucinich, one of the most passionate internationalists in Congress,
doesn't think that it is a particularly wise strategy to have the U.S.
government financing the downsizing of this country's manufacturing
capacity.

He's right about the issue.

He's also right about the need for Congress to get involved with this issue.

Here's Kucinich's recent statement -- originally delivered to 600
UAW/GM retirees in Ohio -- on the dramatically-misguided GM bailout
scheme:

According to news reports today, the federal government
will provide up to $50 billion dollars in financing to see General
Motors through perhaps the most complex bankruptcy in American history.
U.S. taxpayers, including the workers of GM, are providing these funds.
We must ensure that this investment works in their best interest.

We must not allow GM to use U.S. taxpayer dollars to close plants in
America in order to open markets for products made in China and other
countries. It is unacceptable to ask U.S. workers to subsidize the
exportation of their own jobs. The taxpayer's investment should be used
to protect American plants so that American workers can build the next
generation of automobiles.

Public statements that Treasury cannot be involved in the internal
matters of GM management fly in the face of the fact that U.S.
taxpayers will own GM. They can and should intervene in order to
protect the American automotive industry and the investment of American
taxpayers.