NorCalSavant

Late last night Senate Republicans balked at supporting the bailout legislation negotiated by the Democrats and the White House.  I was a little disappointed even though I am no fan of the Big Three management.

The Senate Republicans wanted UAW to agree to cutting worker compensation to the same as that for Toyota, Honda and Nissan workers in the U.S. within a year, whereas UAW wanted to wait till 2011, when their current contract runs out.  UAW has made concessions during the crisis in an effort to ensure a government bailout of the Big Three.  Apparently, it wasn’t enough for a deal.

In the end, I think, politics prevailed.  Republicans, sworn antagonists of labor welfare, and the labor, sworn Republican antagonists, could not come to an agreement while jointly agreeing that it is not a good time for one or more of the Big Three to fail.

While the Republicans blamed labor and the car companies to be responsible for the mess they are in today, they did not answer to the issue of the impact of failure during an already severe recession.

Anyhoo, the last of this drama has not been played out yet.  Cooler heads have prevailed.  The White House is promising to find a way to loan the money to the Big Three, may be from TARP, the Troubled Assets Relief Program, subject of course to the already negotiated conditions.

The government has already committed almost all of the $350 billion of the first tranche of that program.  Hank Paulson, the Treasury Secretary might have to go back to Congress for additional approval to spend any more.

The drama will continue.  But hopefully, things will resolve in a more positive way.

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