The Big Three automakers sent their CEO’s to Congress yesterday to lobby for immediate help but were not met with an overly receptive audience. Despite the feverish pace of lobbying it appears clear that no package will get through in this session, unless the Democrats are willing to amend prior legislation granting $25 billion for the big three to make advances in fuel efficiency. For now they do not appear to be willing to do so:

The White House adamantly opposes the idea, saying it would raid money needed to stabilize the financial system. President Bush has urged lawmakers to modify and accelerate the existing $25 billion loan program to build fuel-efficient vehicles, but the car companies, House Speaker Nancy Pelosi (D-Calif.) and other key Democrats are unwilling to divert the money from its original purpose.

Why the Democrats are not willing to go along with the President now, and refile the older legislation in a new session is a mystery to me.

G.M. CEO Rick Wagoner also threw cold water on the idea of a Chapter 11 bankruptcy that would provide government help by extending credit to the company as it reorganizes.

When Corker raised the prospect of a prearranged bankruptcy with the government offering to help one or more of the firms restructure under court supervision, Wagoner snapped back that the idea is “pure fantasy.”

A bankruptcy, he said, “would ripple across this economy like a tsunami we haven’t seen. It seems to me like a huge roll of the dice.”

U.A.W. President Ron Gettelfinger has said that the focus should not be on the U.A.W. contract, but on the economy. He has pointed to the many concessions given by the U.A.W. in the last contract as evidence that wage parity has been achieved with foreign automakers. But Gettelfinger is not living in reality if he believes that federal money is coming without a further restructuring of the labor costs of these companies. Today’s editorial in the Boston Globe is likely reflective of Congressional sentiment:

The UAW argues that its 2007 contract already contained major concessions, including a two-tier wage system under which new workers earn much less than veterans. In addition, workers at General Motors and Ford Motor Co. approved landmark deals last year requiring them to pay for a portion of their healthcare coverage; previously, the auto companies footed the bill.

But companies across the country are shedding workers and benefits, and no one is showing them much sympathy. There will be no taxpayer-funded federal rescue plan for those Americans who don’t work in industries considered too big to fail. If they are lucky enough to continue working, they have no recourse once employers decide to cut benefits. If they lose their jobs, they face the fear of long-term unemployment and an uncertain economic future.

The average American worker lacks the protections longtime UAW members still enjoy. For example, UAW contracts include a provision giving workers 95 percent of their wages while on layoff, along with other job-security provisions.

Concessions shouldn’t be a one-way street. As a condition of any bailout, auto executives should be prepared to reduce their ranks, accept management changes, and take cuts in salaries and bonuses, too.

If union and management can’t agree on some concessions in exchange for federal help, they risk the other b-word: bankruptcy. There would be no negotiating then, just a court-ordered restructuring of these failed auto giants. Labor contracts would be neutered in a bankruptcy filing. If the UAW wants to avoid that unpleasant scenario, it should soften its tone on concessions.

Get ready for a bankruptcy filing by G.M, unless the Democrats make a deal with President Bush on that existing $25 billion!

http://www.msnbc.msn.com/id/22425001/vp/27769912#27769912