Corker: WH intervention killed auto bill

Sen. Bob
Corker (Tenn.), the lead Republican negotiator on a last-minute effort to bail
out U.S. automakers, said a deal might have been possible Friday had the White
House not intervened.

Corker said that Ron Gettelfinger, the president of the United Auto
Workers (UAW), has halted discussions after receiving indication from White
House officials that they will use funds from the Troubled Asset Relief Program
(TARP) to save U.S. automakers.

{mosads}Senate Republicans’ failure to reach a deal with Democrats and their
union allies has cast doubt on whether carmakers will be required to accept
restructuring conditions they agreed to Thursday.

A GOP senator involved in Thursday’s negotiations said that the UAW had
agreed to reduce the bulk of their outstanding debt through an equity swap with
bondholders and to accept corporate stock as 50 percent of the payments to
union accounts for retired and disabled workers.

Those concessions may not happen because Senate Republican and Democratic
negotiators could not reach agreement on a third major issue: reducing employee
labor and benefit costs of U.S. automakers to par with foreign competitors.

Corker told reporters Friday that Democrats and Republicans might have
still reached agreement if talks had continued. He said, however, that changed
when White House officials indicated they were poised to tap TARP to save the
automakers.

“We would have had a whole lot better chance of agreement if the White
House hadn’t said they’re getting ready to put money in,” Corker told a group
of reporters after his press conference.

Corker said he had put a call in to Treasury Secretary Henry Paulson
and would urge Paulson to attach to the relief at least two of the conditions
Democrats and Republicans had agreed to Thursday.

Corker declined to say that Republicans had missed an opportunity by
not yielding on autoworkers’ wages, the issue that scuttled the bailout
package. He said many Democrats also wanted to see the industry required to
reduce its debt, such as through equity swaps with bondholders and/or equity
contributions to Voluntary Employee Beneficiary Associations.

White House officials sought to reassure the financial markets shortly
before they were scheduled to open Friday.

“[G]iven the current weakened state of the U.S. economy, we will
consider other options if necessary — including use of the TARP program — to
prevent a collapse of troubled automakers,” said White House spokeswoman Dana
Perino in a statement issued minutes before
markets
opened.

Corker said that after Gettelfinger received indication that federal
aid was coming, he did not see a need to continue negotiations.