Behind the UAW’s rejection of tough loan terms Thursday night (see the item Ed links below; nice title, by the way) — essentially a pre-packaged bankruptcy as crafted by Sen. Robert Corker — was a larger game of chicken the UAW is playing with the Bush White House.
Banking on the fact that the White House does not want to see America’s largest car company go bankrupt in its last month in office, the UAW and Democrats had crafted a bill that would essentially put GM and Chrysler on transfusion until the Obama White House got its sea legs and proposed an extensive aid plan — read, nationalization — for the Detroit automakers next year. The White House had dutifully surrendered to its weak terms Wednesday.
Trouble for Democrats is, GM says it will run out of cash December 15.
Recognizing the opportunity to save taxpayers billions of dollars and finally put the Detroit Three on firm footing, Corker drafted an amendment that would have attached firm, Chapter 11-like terms to the loan money immediately — using the stick of a bankruptcy by March if automakers did not comply — while the Bush administration is still in office.
Corker spoke to this window of opportunity directly on the floor last night:
I know there’s been a lot of negotiations that have taken place between the White House and House Democrats. I really feel the product that’s been developed is a very poor product, and I really don’t blame that on my Democratic colleagues who negotiated, because I know the White House is actually at a point where they’re looking for the next flight out of town on January 20th and basically want to kick the can down the road and let some other administration and some other Congress deal with this issue.
But all of us are going to be here next year, and I think it’s our responsibility to deal with this issue in a professional, competent manner and actually solve this problem.
The UAW did not blink last night, however. They refused the sacrifice necessary to keep their employers solvent.
With Corker’s terms dead on Capitol Hill, the ball was back in the White House court. And they blinked. This morning, the White House announced it would look at releasing some of the $700 billion TARP money to “save” GM.
Today’s White House statement paid lip service at the end to the need for union concessions. But apparently, that will be President Obama’s problem.