FORT WAYNE, Ind. — One of Indiana’s Republican congressmen says he is “looking for a reason” to support the $34 billion rescue plan for automakers, while a Democratic colleague believes the industry will get more help after President-elect Barack Obama takes office.
The CEOs of Detroit’s Big Three testified at congressional hearings Friday for a second day on why they needed immediate federal assistance to survive. The troubled financial health of General Motors, Ford and Chrysler has put thousands of auto industry jobs in Indiana at risk.
Republican Rep. Mark Souder’s district includes a GM truck assembly plant near Fort Wayne, and he said he feared what would happen to the regional economy if that plant closed, costing the jobs of its 2,700 workers and an estimated 10,000 people at parts suppliers.
“I represent a GM district. I represent a GM city, and I am looking for a reason to vote ’yes’ if there is a reasonable plan,” Souder said after meeting Thursday with about 30 representatives of the auto and related industries.
Democratic Rep. Joe Donnelly, whose district includes Kokomo, where Chrysler has some 5,000 workers, said he believed federal loans to the automakers were needed and that Congress would approve a package.
“I believe that what might happen is a portion of the funds will be provided to get them into next year,” Donnelly said. “Once a new president is in place, there will be additional help in the spring.”
Republican Rep. Mike Pence said he opposed the bailout plan but would support giving automakers the ability to renegotiate contracts with suppliers and unions.
Pence favors a proposal that would dedicate $350 billion from the financial industry bailout package toward a tax holiday from personal federal income taxes and Social Security taxes during January and February.
“I think Congress can extend the authority of a reorganization, like a bankruptcy, to the Big Three automakers and give them the legal flexibility to rework their business plan without ever having to call it that,” Pence said.
The prospect of bankruptcies worries Souder, who says it could make consumers more wary of buying vehicles from the American companies and compound the downward spiral.
“Bankruptcy is not really an option,” he said.
Democratic Sen. Evan Bayh said that doing nothing for the automakers would be the riskiest course of action for Congress.
“Given the great deal of uncertainty already present in the economy, it suggests to me that this is a time for a more cautious approach, to try to minimize the amount of fragileness, uncertainty, instability in an economy that already has plenty of all of those things,” Bayh said. “If we do nothing, there would be a significant economic impact on a whole lot of middle-class folks.”
Republican Rep. Dan Burton said Marion’s mayor had told him an automaker bankruptcy would cost the city $5 million in tax revenues. Burton, though, said he was undecided on the bailout plan and worried that Chrysler might merge with another company even if a loan is approved.
“The bottom line is I don’t believe the current plan will pass the Senate,” Burton said. “I believe that GM, Ford and Chrysler have to survive until President Obama takes office. In January, a program will be worked out.”
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