Congressional Action on Emergency Bridge Loans for the Domestic Auto Companies

After the credit and economic crises hit our nation in September, auto sales dropped to their lowest level in a quarter century. As result, the revenues received by GM, Ford and Chrysler dropped sharply, causing these automakers to burn through their cash reserves at unsustainable rates. It soon became apparent that GM would run out of cash by the end of 2008, and Chrysler soon thereafter. These companies would then be forced to liquidate, ceasing all business operations. The collapse of these companies would inevitably drag down numerous auto suppliers, which in turn would lead to the collapse of Ford.

Faced with this dire situation, the UAW and the domestic auto companies immediately began a campaign to convince the Bush administration and Congress to provide emergency bridge loans to enable the companies to weather the economic and credit crises. President Gettelfinger and the CEOs of the companies testified several times before Congress. The UAW emphasized that the collapse of the domestic automakers would have dire consequences for millions of workers and retirees, and for the economy of our entire country. The companies presented detailed plans showing the need for the emergency assistance and how their operations would be restructured in the future to ensure long term viability.

Democratic congressional leaders ultimately crafted legislation that used existing funds in the Section 136 Advanced Technology Vehicles Manufacturing Incentive Program (ATVMIP) to provide $14 billion in emergency bridge loans to the domestic Congressional Action on Emergency Bridge Loans for the Domestic Auto Companies auto companies. This legislation, which was agreed to by the White House, contained strict accountability measures, including limits on executive compensation, a prohibition on the payment of dividends, an equity stake in the companies to protect taxpayers, and an Advisory Board to oversee the operations of the companies. In addition, the legislation conditioned the bridge loans on the companies pursuing restructuring plans that would have to be approved by an “auto czar” to ensure their long-term viability.

The UAW mounted an all-out campaign to persuade Congress to approve this legislation. UAW activists did a tremendous job at the grassroots level in lobbying their Representatives and Senators. President Gettelfinger made numerous appearances on television and radio programs to present the union’s case for the bridge loans.

On Dec. 10 the House passed the legislation providing the bridge loans to the domestic auto companies by a vote of 237- 170 (R 32-150; D 205-20). But the Senate GOP caucus opposed this legislation, even though it had been agreed to by the Bush White House. The Senate GOP caucus also rejected a compromise proposal that the UAW negotiated. In the end, when Senate Democratic leaders tried late in the evening of Dec. 11 to take up the auto bridge loan bill that had passed the House, GOP Senators used a filibuster to block the legislation. An effort to invoke cloture to cut off the GOP filibuster failed by a vote of 52-35 (R 10-31; D 40-4; I 2-0). It takes 60 votes to stop a filibuster.

Because the votes on the auto bridge loan legislation took place in December during the lame duck session of the 110th Congress, they were not included in the original voting record prepared by the UAW. However, in view of the paramount importance of these House and Senate votes for the UAW and the domestic auto industry, we have included the roll calls on these votes in this special supplement to the voting record. We strongly urge you to pay close attention to how your Representative and Senators voted on this critically important issue.