Panel on Aid for the Automakers

Panel on Aid for the Automakers

FOX News Special Report With Brit Hume - December 8, 2008


REP. BARNEY FRANK, (D) MASSACHUSETTS: Thanks to that breakthrough by the Speaker's willingness to speak constructive, we have been able to send them a bill that we believe, as we understand the conversations, meets what they think is necessary.

REP. NANCY PELOSI, (D-CA) HOUSE SPEAKER: It may take more than $15 billion to get to March 31st. But come March 31st, it is our hope that there will be a viable automotive industry in our country.


HUME: What the deal that Barney Frank was talking about, a bill, as he said, as he described it, he is talking about sending it to "them." He means the White House. And he says that the bill would meet what they think is necessary.

Well, the White House wasn't very enthusiastic about it tonight, and one of the reasons is what you heard Nancy Pelosi say. This bill would use $15 billion of funds already approved for the purpose of making automobiles more green and would use it to keep the auto companies in business for a while longer. And she now comes along and says it is going to take more than that.

So this is what the controversy about is tonight. It's not clear whether this deal is going anywhere or not. Some thoughts on it now from Fred Barnes, Executive Editor of "The Weekly Standard," Mara Liasson, National Political Correspondent of National Public Radio, and the syndicated columnist Charles Krauthammer, all FOX News contributors.

Fred, where do we stand?

FRED BARNES, EXECUTIVE EDITOR, "THE WEEKLY STANDARD": I think there will be something passed, and it won't be enough to get to March 31st. So something more will have to be passed. And then something more will have to be passed after that--

HUME: Yes, but the White House didn't sound very happy with this, that not even this could pass.

BARNES: The only thing that matters--if Nancy Pelosi really wants to make the auto companies in Detroit, the big three, viable, then you have to do certain things which I doubt she is ready to do. And that is they have to get rid of all their nearly $30 billion in bonds, sell them at 30 cents on the dollar.

They have to get rid of -- I mean, they owe $21 billion just to the pension trust fund, the UAW. The UAW hasn't said it would forgive any of. That the UAW has said, oh, well, you can delay your payments. But this unsustainable debt just will still be sitting there on their books. That means that they're not viable.

And then they have to do something to make themselves competitive.

Barack Obama said he wanted -- his standard was--he said this once at one of his press conference a few weeks ago--that they need to be globally competitive. Globally competitive. They are so far from globally competitive--

HUME: Excuse me, aren't they making money on their sales overseas?

BARNES: They do, yes. But there they don't have a UAW. So it is quite different there.

They also need to bring down the UAW wages and benefits, the whole package, so it can be something near the transplants in the south that, you know, the foreign auto companies that are there making a lot of money, and they are globally competitive.

But unless you require them to do all these things you're not going to have viable, profitable firms that are worth investing in.

Let me just say one more thing--

HUME: Go ahead.

BARNES: A great question by Bob Corker last week at the hearings was how come the company that owned you, he asked Chrysler, how come the company that owns you, Cerberus, a private equity firm, how come they don't invest this $7 billion your company?

He didn't answer it, but you know what the answer is? They think Chrysler is not a good investment, it's a dog. Now they want the government to do it instead.

MARA LIASSON, NATIONAL POLITICAL CORRESPONDENT, NATIONAL PUBLIC RADIO: Part of becoming globally competitive is not just--the current wages for people starting at U.S. auto companies are the same as all those U.S. workers who work for the foreign companies in Tennessee and Kentucky.

But it's the people who have seniority there, that is going to be the target. If the auto companies are going to get in line with all these other foreign companies they are going to have to cut their wages to those people--

HUME: Are you hearing anything from the Pelosis or the Franks or the auto industry or the union that suggests they are willing to really tackle that?

LIASSON: Well, they will have to.

Part of this deal is there is going to be a car czar. There is going to be some oversight to make sure they make changes. They are going to have to present a plan. The plan is due in different pieces, but the big final bit of it is due on March 31st.

I think the biggest thing that happened was that Nancy Pelosi moved. Originally, remember, she didn't want to take money out of the energy bill.

HUME: But they are claiming it will be paid back very quickly.

LIASSON: That's what she says, but the point is that the White House insisted that money out of-the big pot of bailout money not be used for the auto companies, and it's not.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: I think everybody knows the end point here has to be a radical restructuring. The most radical would be if it goes into Chapter 11 and the judge does it, all the contracts are dissolved, and he has got complete control.

What I think is happening here is what they're trying to create is a glide path into that or the equivalent of that. You are never going to get a Democratic Congress imposing reduction in wages of UAW workers.

But you might get, and what I think is being negotiated here, is a temporary loan and the appointment of one-person by the executive, by the president, who would have the authority to declare that the companies are not serious about restructuring and recall the loan, which immediately puts all of them into bankruptcy, into chapter 11.

So if he has that power, then he has all of the leverage you would want over--

HUME: And this would be someone named by the Bush administration and whose job, whose term would carry over into the next administration?

KRAUTHAMMER: The tenure would go into the next administration.

But the question is does he or she have that power, and if he does -- or she does, then he has the power to impose, or at least to call in the stakeholders, that is, the unions, the management, the dealers, the bond holders, and the suppliers.

HUME: Do you think this will happen?

KRAUTHAMMER: I think it's going to happen because nobody is going to let the companies die over Christmas.

LIASSON: This is going to happen. This bridge loan is going to happen.

BARNES: That will. But the car czar, whether or not they will give the car czar that much power or not, I don't know.

I have a nominee--Phil Gramm!

HUME: One senses the Obama administration might not accept him.

BARNES: They have to.

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FOX News Special Report With Brit Hume


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