Driving Toward Protest or Prosperity?
As President Obama returns from his trip to Europe and Iraq, he will be dealing with ongoing questions about the steps he took last week to address the troubles in the U.S. auto industry. Did his actions represent an overstepping? Are people tired of or reassured by government intervention in private companies? Has the administration’s treatment of Wall Street firms been more favorable than its dealings with the more “Main Street” automakers? Whatever the answers to the above questions, the administration’s latest efforts on the auto front elicited a mixture of praise, befuddlement, and opposition on Capitol Hill.
The administration’s Auto Task Force made headlines after panning the GM and Chrysler restructuring plans and forcing out GM CEO Rick Wagoner. They also gave Chrysler thirty days to pull off a shot-gun wedding with Italian carmaker Fiat, asserting that Chrysler “is not viable as a stand alone company.” The administration even entered into the car warranty business, setting up a program to reassure prospective buyers of new GM and Chrysler automobiles that their warranties will be honored regardless of the automakers’ futures.
While Speaker of the House Nancy Pelosi (D-CA) issued a statement supporting the administration, it was very generic. Even the Michigan delegation, which generally praised the warranty program, grumbled about Wagoner’s ouster, the automakers’ treatment compared to the banks, and the tight timelines with the government giving Chrysler 30 days and GM 60 days worth of working capital before facing the prospect of bankruptcy.
The harshest criticism came from an unexpected source—Sen. Bob Corker (R-TN), the respected Senate Banking Committee member who worked hard back in December to broker a bipartisan compromise on auto bailout legislation. In a statement, Corker called the administration’s forcing the resignation of GM’s CEO a “sideshow to distract us” from the lack of progress with the automakers. Corker’s closing line took the issue beyond just the automakers and issued a broader warning, saying,
“This is a marked departure from the past, truly breathtaking, and should send a chill through all Americans who believe in free enterprise. I worry that in one fell swoop we’ve lost our moral high ground throughout the global community as it relates to chastising other countries that use strong arm tactics to invade on private property rights.”
It should be noted that Corker's state is home to Nissan and GM plants, each of which employs roughly 3,000 people.
Corker is an emerging leader in the Republican party, especially on economic issues, but what matters is whether or not his broader message takes root outside of the minority party. It could be one for the archives or it could add fuel to populist movements—such as the tea party protests—that are cropping up in opposition to federal bailout efforts. If the movement grows, moderate members of Congress may force the Democratic leadership to break ranks with the administration.
