GOP Southern Senators block loans to Big 3

The proposal to give the Big Three automakers billions dollars in emergency loans came a cropper when, on Thursday last, the United States Senate has rejected the plans to offer a  House of Representatives and the White House approved a $14bn rescue loan to the big Detroit three carmakers GM, Ford and Chrysler, late on Thursday last.

 The reasons for its failure are according to Sunday’s Salon are easy to find.

The fiercest opposition to the loan proposal — and nearly a third of the 35 votes against ending debate on the deal — came from Southern Republicans, and the ringleaders of the opposition all come from states with a major foreign auto presence. Not coincidentally, nearly all of those states — except Kentucky — are also “right-to-work” states, which means no union contracts for most of the employees at the foreign plants. The Detroit bailout fell victim to a nasty confluence of home-state economic interests and anti-union sentiment among Republicans.

This week Southern Republicans had a chance to go to bat for foreign automakers while simultaneously busting a union. At a hearing last week, Corker explained that his constituents “have a tough time thinking about us loaning money to companies that are paying way, way above industry standard to workers.” Which may explain why his proposed alternative to the loan agreement between Congress and the White House would have required the United Auto Workers to agree to significant wage cuts next year, based on a spurious claim that union workers earn significantly more than non-union workers.

The double-whammy was too hard to resist, I suppose.

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