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A $14 billion emergency bailout for U.S. automakers collapsed Thursday night in the Senate after the United Auto Workers refused to accede to Republican demands for swift wage cuts.
Walz, whose Winona dealership sells Buick, Pontiac, Chevrolet and GMC vehicles, kept close tabs on the debate. The parent company of his vehicle lines, General Motors, appears in the worst shape of the three automakers: its CEO, Rick Wagoner, has said the company may not last a month without a huge cash infusion.
Supporters of the bridge loan — some call it a bailout — to automakers warn of potential economic catastrophe if one or all of the companies file for bankruptcy. Walz’s dealership employs 40 employees, and it’s one of several Winona-area businesses tied to the American auto industry.
But despite the high stakes for Walz and his business, he said Thursday that lawmakers shouldn’t bail out U.S. automakers without pledges from United Auto Workers and other unions to restructure labor contracts.
“We really need an overhaul,” Walz said. “I don’t think (Congress) can just give us the money.”
The bridge loan is necessary not just for auto manufacturers but for their suppliers, said a spokesman for TRW Automotive, which employs more than 500 at a Winona plant that makes interior-control systems for Chrysler and other automakers. Spokesman John Wilkerson said he can’t predict what will happen to TRW if lawmakers don’t pass the legislation, but warned that a failure by one automaker could extend far beyond a single company.
“If the automakers cannot pay invoices, there could be a large ripple effect of suppliers that also fail,” Wilkerson said.
Rep. Tim Walz, DFL-Minn., was one of just 20 Democrats who voted against the House bill, arguing it wouldn’t prevent automakers from outsourcing jobs and didn’t contain enough protections for taxpayers.
Troller wrote on Dec 19, 2008 9:02 AM: