Congressman explains his vote
Special Bulletin: December 12, 2008
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Rep. Marchant Votes "No" on HR 7321
On December 10, 2008, I opposed legislation proposed by Congressional
Democrats to address the crisis facing the American automotive
industry. Like the $700 billion bailout that passed in early October,
which I opposed, this bill (which passed 237-170) exposes taxpayers to
considerable risk and liability with few assurances that it will work
or that it will be the last money spent to address the issue.
The problems facing the automotive industry have been exacerbated by
the recession. The combination of unfeasible and impractical
environmental regulations and uncompromising labor costs has brought
the entire American automotive industry to the brink of extinction.
Having said that, I do believe it is important to have a robust
American manufacturing base in America – but only if the industry is
willing to undertake dramatic reforms, which heretofore they been
unable to do.
The bill we voted on is fundamentally flawed, as it lacks the
accountability and oversight provisions to ensure the protection of
the American taxpayer. Furthermore, I am not convinced that this
legislation will result in the industry's long-term viability,
sustainability, profitability, and competitiveness – which should be
the goal of any assistance. I have long believed that the American
automotive industry needed complete restructuring and this bill does
not fully address my concerns about management at the Big 3 or the
labor union contracts.
As is typical in the House these days, alternative bills and
amendments to improve this bill were not allowed to be debated or
voted on. I did, however, support an alternative proposed by House
Republicans Eric Cantor and Mike Pence that would 1) reform the auto
industry and allow American automakers to become competitive again,
while 2) protecting the taxpayers. The alternative bill I supported,
"The American Automotive Reorganization and Recovery Plan," would have
locked in a restructuring plan within a few weeks rather than months
or years. The bill would require the companies' creditors agree to a
framework to reduce each company's indebtedness by at least 1/3.
Furthermore, United Auto Workers would agree to their recently stated
concessions in addition to: 1) eliminating Supplemental Unemployment
Benefits; 2) eliminating the Jobs Bank Program; 3) reducing company
retiree health care obligations OR converting a portion of obligations
into equity; and 4) reducing wages and benefits to levels paid by
non-Big 3 manufacturers. Rather than a "Car Czar", this bill would
mandate restructuring through pre-packaged bankruptcy or another
mechanism that would bring all stakeholders to the table in earnest
and achieve a workable plan towards viability. The bill also
acknowledges the need for interim financing to begin restructuring; as
such, the legislation proposes that the government provide insurance
(funded with a modest FDIC-like fee by the participating corporations)
which would cover up to half of the losses of new investment in the
case of default, unleashing private investment (not unlike debtor in
possession financing). The insurance, which would expire March 31,
2009, would protect the taxpayer while incentivizing the Big 3 to
implement their restructuring plans without delay.
You can access the roll call vote here:
http://clerk.house.gov/evs/2008/roll690.xml.
I am honored to represent the 24th District of Texas, and appreciate
your interest in my e-newsletter. Please contact my District or DC
office with any further questions you may have or visit my website at
www.marchant.house.gov.
Sincerely,
M
Kenny Marchant
Member of Congress
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