GOP Auto Bailout Critic Outlines Rationale

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Sen. Jim DeMint (R-SC), who opposes the proposed bailout of U.S. automakers, says the companies should go into Chapter 11 bankruptcy, which would force them to reorganize. He says the proposed "car czar" to oversee the automakers' restructuring is a "ridiculous" idea.


We're joined now by one of the Republican senators who opposes the bailout for the auto industry. Senator Jim DeMint of South Carolina joins us now, and Senator DeMint, why are you so strongly opposed to a bailout even though the car makers have made it absolutely clear that - they say they won't survive without this?

Senator JIM DEMINT (Republican, South Carolina): Well, I want to make it clear that I want these companies to survive. I drive Fords, and I've driven American cars all my life, and I want to have a strong American manufacturing sector, especially in automobiles. So - and my goal is that we succeed here in making sure that they succeed. But I'm trying to figure out the best way to do it, and there's some things the government can do, and there's some that government can't do. And for this federal government to set up a car czar, who is going to make decisions about how the American automobile companies operate, is kind of a ridiculous idea. This government cannot manage the functions that it already has. It's done a terrible job with the bailout money that has already been appropriated by Congress, you know.

And so it's not that I don't want these companies to succeed. I just know that they have to reorganize before they can succeed. And it's a large part because of the contracts with unions and their heavy debt and financial structure. The only way they can get out from under, either one of those, is under the protection of Chapter 11 bankruptcy, where it essentially gives them the right to restructure all of their finances as well as their union contracts. So, my goal is to force them in a position where they have to do that because they're not now.

NORRIS: Now, you know the unions are saying that this is also a political ploy on the part of the Republicans to try to get rid of unions and use the auto industry troubles to do just that.

Senator DEMINT: Well, I'm not trying to get rid of the unions, but I am saying that they appear to be an antiquated concept in today's economy. And if a company cannot be competitive with the union structure that they have, then we need to recognize that. The taxpayer should not be obligated to prop up these union bosses who have put the American car companies against a wall with these contracts and the threat of strikes over the last several decades that have essentially put them out of business. And they want the taxpayers to pay for that, and that doesn't make any sense. We have to force this management out or force some dramatic changes, and we've got to save these companies.

NORRIS: You're out of step with the White House on this. The administration has indicated that they like the progress on this bill, and they're willing to pick up the phone and do some arm-twisting. So when they call you and ask you to get in line behind this plan, what do you say to them?

Senator DEMINT: I can almost guarantee you they won't call me because I learned a long time ago that the administration is not necessarily shooting me straight on things. They didn't do it on the bailout that was passed a while back; there was this wild panic to do some - $700 billion that had to be used in a specific way. A few weeks later, they said, well, that wasn't the right way, we're going to use it another way. And I think that's left a bad taste in a number of members of Congress' mouth. And they don't really trust what we're hearing right now. I don't think...

NORRIS: You're saying you don't trust the White House?

Senator DEMINT: No, I don't. And I don't think we should be making decisions that are this important, in some kind of Chicken Little scenario with panic, and that's what really is happening here. And I mean - these car companies are in real trouble, and they should have been planning to restructure for a long time. But the political aspect of this is most of this is being done to protect unions. It's not to protect the workers. And what I want to do is make sure we have jobs for these workers, and we have first-class American automobile companies. And we're not going to do it with the barnacles of unionism wrapped around their necks.

NORRIS: We've been speaking to Senator Jim DeMint. He's a Republican from South Carolina. Senator DeMint, thanks so much for speaking to us.

Senator DEMINT: Well, thank you very much.

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