Politics Indiana V15 N18 Thursday Dec. 11, 2008 Big 3, Indiana twisting, twisting ... ‘Fluid, chaotic’ Senate vote; State in for big impact By BRIAN A. HOWEY INDIANAPOLIS - In the wake of a 237-170 House vote for the Big 3 rescue Wednesday night, a “fluid” and “chaotic” second chapter is playing out in the U.S. Senate today. President-Elect Barack Obama urged passage of the legislation this morning, calling it “an important start.” He said at his Chicago news conference U.S. Sen. Richrd Lugar trying out a Toyota with a new lithium power ed battery. He is still reviewing he was “hopeful an agreement information on a Big 3 rescue which could also impact Honda, Toyota and thousands of auto sup- can be reached this week” and pliers in Indiana. (HPI Photo by Brian A. Howey) warned of a “devastating ripple effect” on the U.S. economy. the Republican caucus yesterday that there are alternative Andy Fisher, spokesman for U.S. Sen. Richard approaches Republicans would like to have heard,” said Lugar, agreed with Ohio Sen. George Voinovich’s comments Fisher. While he said a cloture vote is likely on Friday, that won’t mean a vote on the package in today’s Washington Post: There aren’t enough votes to See Page 3 pass the $14 billion plan in the Senate. “It was obvious in Personal for Donnelly By JACK COLWELL SOUTH BEND - Joe Donnelly takes it personally. That’s because the congressman from Indiana’s 2nd District knows personally so many of the people, his constituents, who would go under right along with General Motors, Ford and Chrysler. “I was appalled and disappoint- Donnelly, who serves on the House Financial Services Committee, the pan- ed by what we heard in those el considering pleas for help from the Big Three auto producers, rejects the transcripts.” cynics who snarl: Let them go broke. Let them drive Toyotas. Let them eat - President-Elect Barack Obama cake. on the sale of his Senate seat by Il- “These are our jobs for our families in our area,” Donnelly says of what’s at linois Gov. Rod Blagojevich stake. HOWEY Politics Indiana Page 2 Weekly Briefing on Indiana Politics Thursday Dec. 11, 2008 In his congressional district, heath care benefits, with no payments Howey Politics Donnelly calculates, there are 15,000 on over $7 billion in outstanding auto people employed in auto-related parts and service supplier invoices, Indiana jobs. And in Kokomo plants - Chrys- forcing thousands of suppliers out of is a nonpartisan news- ler and Delphi - just a mile or so business, with closing of 3,300 dealers, letter based in Indianapolis south of the boundary between the idling another 140,000 employees, with 2nd and 5th Districts, there are an- loss of significant value for 31 mil- and published by NewsLink other 6,600 jobs in auto production. lion Chrysler, Jeep and Dodge vehicles After reviewing the ex- through owners losing warranties and Inc. It was founded in tensive new proposals from the Big being left with limited replacement 1994 in Fort Wayne. Three and the major parts and service op- concessions from tions. the United Auto And that’s just the Brian A. Howey, publisher Workers, Donnelly is smallest of the Big Mark Schoeff Jr., prepared to support Three. Washington writer the “bridge loans” If a loan sought from the package finally is ap- Jack E. Howey, editor government to keep proved to help the Beverly Phillips, associate the auto industry automakers along a editor and subscription from “falling off a promised path toward management cliff.” improved products and But didn’t productivity, Donnelly Subscriptions: the Big Three go contends that taxpay- $350 annually HPI via e-mail; to the precipice ers will not be left foot- $550 annually HPI & HPI Daily through their own ing the bill. failure to be more He notes that when Wire. competitive? Chrysler received fed- Call 317-627-6746 Yes, there eral loan guarantees in were mistakes in 1979 to survive amid the past, Donnelly recession and an oil cri- Howey Politics Indiana U.S. Rep. Joe Donnelly acknowledges. But sis, the loans were paid 6255 North Evanston he says the auto back seven years early Indianapolis, IN 46220 makers weren’t the and generated millions sub-prime culprits and didn’t bring in interest for the taxpayers. Contact Us: on the credit crisis and recession that Donnelly says initial congres- now causes car sales to plummet. sional rejection of helping the auto www.howeypolitics.com “They have been like the boy who executives, who flew to Washington on bhowey2@gmail.com cries ‘wolf’ in the past,” Donnelly also their private jets, wasn’t really about Main Office: 317-202-0210. acknowledges, citing past Big Three their method of travel, although the pleas to save them through delaying jet-setting was a public relations blun- Howey’s Mobile: 317-506-0883. stricter fuel standards. der. Indianapolis Fax: 317-254-0535. Now? “There is a wolf here,” The real problem, Donnelly Washington: 202-256-5822. says Donnelly. says, was that they didn’t have detailed Business Office: 317-631-9450. He points to the warning plans for what they would do with the on page 12 of Chrysler’s proposal: assistance. And Congress was looking ©2008, Howey Politics Without financing help, “Chrysler at their plea for money the same way Indiana. All rights reserved. would be left with no choice but to banks look at applications for loans: Photocopying, Internet forwarding, commence liquidation,” with all 29 Show us what you’re going to do with faxing or reproducing in any form, of its manufacturing facilities and the money and how you intend to pay 22 parts depots permanently shut it back. in whole or part, is a violation of down, with 53,000 of the company’s Whether they came to Wash- federal law without permission from hourly and salaried employees ington last week by plane, by train or the publisher. terminated immediately, eliminat- on horseback wasn’t as important as ing $7.2 billion in annual wages and whether they came this time with vi- HOWEY Politics Indiana Page 3 Weekly Briefing on Indiana Politics Thursday Dec. 11, 2008 able plans for change and long-term profitability. The U.S. automakers now are on a competitive They seem to have done so, except in the view of footing with Toyota plants in this country in terms both of cynics who want to punish them for sins of the past and wages and productivity, Donnelly says, citing statistics from their workers for contracts of the past. the Big Three proposals. Donnelly takes it personally when he hears “It’s do or die,” Donnelly says. Without help, Gen- distorted figures suggesting that the workers in auto-re- eral Motors will go under by the end of the year. The others lated jobs in his district are overpaid. Some news accounts could follow. If they die, so will the jobs of a lot of people placed UAW wages at over $70 an hour, a figure contrived in Indiana’s 2nd District. So will the economic viability of by adding in all of the legacy obligations of all past con- the area. That’s why Donnelly takes it personally. tracts, even though the union has made major concessions in recent contracts, taking over some of those obligations, Colwell has been covering Indiana politics for over and made further concessions last week to keep the auto- five decades for the South Bend Tribune. v makers out of bankruptcy. from TARP funds (Troubled Assets Relief Program). It could Big 3 Rescue also tap into the $25 billion Congress passed that was supposed to help the automakers modernize. And there is this weekend. It could come in a week or two, even with still talk in the Senate of a prepackaged bankruptcy pushed General Motors saying it could go bankrupt by the end of by Tennessee Sen. Bob Corker that would allow the Big 3 the month. Or it could come in early January as new mem- to reorganize on a predictable bers are sworn in. “This schedule. just may carry over to next U.S. Sen. Evan Bayh is year,” Fisher said. backing a Congressional bail President Bush has out. “We’re faced with trying virtually no clout on this to choose the best among issue. As Sen. Judd Gregg unpalatable alternatives. No- told The Politico, “I don’t body wanted to give money to think the Bush administra- the banks or to the insurance tion and Senate Republi- companies, and nobody wants cans are on the same page to give money to the auto in this case. The White industry. I don’t,” Bayh said. House wants to get out of “But if the alternative is losing town without a bankruptcy, hundreds of thousands of jobs and we’re going to be left and having automakers, deal- with whatever they leave erships, part suppliers, and us.” other retailers in local com- Fisher described munities go down. We have the scene as “fluid” and to make a hard choice here. “chaotic.” He explained, People think the economy “It’s not clear how this un- U.S. Sen. Evan Bayh at Allison Transmission in Speedway. (HPI is bad now, but if we let all folds.” The scenario comes Photo by Brian A. Howey) these companies go belly up, as an NBC/Wall Street and all those folks get laid off, Journal Poll released today I’m afraid it would be much worse. reveals that 46 percent of Americans support the bailout “Indiana has a huge stake in this debate.