Sen. Bob Corker on Thursday outlined a plan that he said should be adopted before any loan to the U.S. auto industry is discussed or contemplated.
The hearing, the second in a series examining the industry, included testimony from UAW (United Automobile Workers union) President Ron Gettelfinger, Ford Motor Company President and CEO Alan Mulally, Chrysler Chairman and CEO Bob Nardelli, and General Motors Chairman and CEO Rick Wagoner.
Sen. Corker said, “At today's hearing I suggested a number of very specific and rigorous measures that should be in place before we even discuss making a loan to any of these companies.
· “One, give existing bondholders 30 cents on the dollar to help reduce their overall debt load.
· “Two, bring wages immediately in-line with companies like Nissan and Volkswagen.
· “Three, GM owes $23 billion to the United Auto Worker’s VEBA (voluntary employees’ beneficiary association) account. The union must agree to take half of that payment in GM stock.
· “Four, the union must agree to do away with payments to workers who are still receiving almost full compensation up to four years after their jobs have ended.
“These are the same types of conditions a bankruptcy judge might require to ensure that these companies become viable and sustainable into the future, and if they will agree to these terms then we have something to talk about. The process I have suggested would allow them to avoid the problems and stigma that accompany a formal bankruptcy, while forcing them to do the things they need to do to be successful companies.”