Saturday, December 6, 2008

Senator Corker has a plan for the Big Three

‘Corker Plan’ Outlined in Hearing with Detroit Three and UAW
“At today's hearing I suggested a number of very specific and rigorous measures that should be in place before we even discuss making a loan to any of these companies.

• “One, give existing bondholders 30 cents on the dollar to help reduce their overall debt load.

• “Two, bring wages immediately in-line with companies like Nissan and Volkswagen.

• “Three, GM owes $23 billion to the United Auto Worker’s VEBA (voluntary employees’ beneficiary association) account. The union must agree to take half of that payment in GM stock.

• “Four, the union must agree to do away with payments to workers who are still receiving almost full compensation up to four years after their jobs have ended.

“These are the same types of conditions a bankruptcy judge might require to ensure that these companies become viable and sustainable into the future, and if they will agree to these terms then we have something to talk about. The process I have suggested would allow them to avoid the problems and stigma that accompany a formal bankruptcy, while forcing them to do the things they need to do to be successful companies.”


Micha Elyi said...

The Detroit-based international automakers need skilled surgery to excise their excess fat, bloated wages and benefit offerings, dead and dying surplus divisions, redundant factories, parasitic dealerships, and hemorraging cost structures. What the Dodd-Pelosi-Reid Democrat Congress offers is an unskilled political hack-job that will be so bad, the result will make Frankenstein's monster look like a plastic surgeon's Hollywood babe make-over by comparison.

Sen. Corker's plan is less bad than hacksaw schemes the Dodd-Pelosi-Reid quacks are proposing to impose on the Detroit automakers. Yet an even wiser course of action is to have the financial surgery performed by a federal bankrupcy court. The bankruptcy judge won't be trying to gin up envy among union lackeys or score political points among the nutroots who just want to kill some icons of American capitalism. Dodd, Pelosi, Reid, and Obama, in contrast, will be looking more at the politics than the economics of whatever deals can be struck, regulations imposed, and loot handed out.

Spiral said...

Micha Elyi,

Thanks for your comment