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Nelson prefers automaker aid over bankruptcy

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By DON WALTON / Lincoln Journal Star

Wednesday, Nov 19, 2008 - 08:56:08 pm CST

Sen. Ben Nelson said federal bailout assistance for the nation’s Big Three automakers would be preferable to allowing them to slip into bankruptcy.

But any aid package should be structured with “rigorously enforced conditions,” Nelson said Wednesday.

“A loan with stock taken as security makes some sense,” he said.

Story Photo
U.S. Sen. Ben Nelson, D-Neb.

Related Link(s):


11.19.08: Big Three rescue stalls in Senate
Nelson urges review of Bush's signing statements

U.S. Sen. Ben Nelson says he hopes President-elect Barack Obama will review all of President George Bush’s signing statements that negated parts of bills Congress approved.

The Nebraska Democrat said Wednesday in a conference call with reporters that he sent a letter to Obama recommending a full review of the statements Bush issued. They identified bill provisions he planned to ignore after he signed the bill into law.

Nelson says he’s especially concerned about a statement Bush issued in October that negated a provision calling for a cost-sharing agreement to be negotiated with Iraq.

Nelson helped write the provision, which was included in a larger defense spending bill.

--AP

And conditions would need to include “changing the direction of vehicle manufacturing to a greener-type vehicle in terms of what it uses as fuel,” Nelson said.

“I don’t believe bankruptcy is the appropriate way to deal with this,” he said during a telephone news conference from Washington.

Later Wednesday, Senate Majority Leader Harry Reid, D-Nev., scrapped plans for a vote on a bill to carve $25 billion in new auto industry loans out of the $700 billion Wall Street rescue fund.

The consequences of bankruptcy could push the U.S. auto industry “from crisis to cataclysmic,” Nelson said.

Democratic leaders in Congress have proposed a plan that would lift $25 billion from the $700 billion financial bailout package to provide emergency loans to General Motors, Ford and Chrysler.

The Bush administration opposes the plan.

“Not doing something is not going to be possible,” Nelson said.

But, in providing any assistance, Congress would need to “require the auto industry to change the way it does business,” he said.

Nelson said he is studying the $25 billion loan plan before committing his support.

Nebraska is affected by the auto industry financial crisis, he said.  Auto dealers, mechanics and auto parts suppliers would all be affected, he said.

“The dots connect from Motown to Our Town, Nebraska,” Nelson said.

Reach Don Walton at 473-7248 or at dwalton@journalstar.com.


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Well wrote on November 19, 2008 12:29 pm:
" The unions caused the problem years ago and they just kept on gouging
and demanding. A guy on TV said, "this is the first time I've ever felt
scared." Well golly gee, now he knows how the non-union people have felt for years and years. A guy at a service company where I worked
a while back kept trying to get unions in, he got fired, and if he hadn't
and pushed that thru that company wouldn't exist today. All I can say,
get in the unemployment line like the rest have to do that lost their
jobs. Because of these unions and high vehicle prices of the big 3, is
the reason millions LEFT the big 3 and bot Honda, Toyatos and etc. If
the Big 3 are that dumb, why should we who struggled to buy their over
priced vehicles all our lives, NOW have to fork over their high union
wages so they can live a wonderful life. And the millions of for instance
GM employees relatives way generations back got discounts for years and
a heck of alot better health insurance than we in non-union businesses.,
I say let 'em go bankrupt, even though I don't like most of the foreign
cars!! The big 3 CEO's sure don't want to lose their millions in pay and
bonsuses!! Where does this stop, every company thinks the world will end
if the little guys don't bail them out. Dam it the CEO's caused it they
need to go under and see how the rest of the people have to live!! "

 Gee Ben wrote on November 19, 2008 12:43 pm:
" If the dems decide it would be wiser to let the automakers go into Chapter 11, I bet you'll say that is the best way to go. Typical politician, let your party think for you. "

 Josh wrote on November 19, 2008 12:48 pm:
" So we're going to nationalize GM, Ford and Mopar now? That's what this quote says: But, in providing any assistance, Congress would need to “require the auto industry to change the way it does business,” he said. You can't have a government directed business model and still be a private company - it doesn't work that way. Talk about having their cake and eating it too. Do we have a capitalist economy, or a socialist economy - you can't have both. Call your Rep and both Senators and tell them your wishes, that's how this works. "

 Gerard Harbison wrote on November 19, 2008 12:52 pm:
" Barney Frank on NPR this morning openly admitted the reason he prefers a bailout to Chapter 11 is that a bailout will preserve the union contracts. In fact, the Big Three can restructure far more efficiently under bankruptcy protection. So Senator Nelson is, in effect, asking Nebraska taxpayers to pony up hundreds of dollars apiece to save the cushy contracts of union members in Detroit.

I guess it's Nelson (D, AFL-CIO), not Nelson (D, NE) "

 TG wrote on November 19, 2008 12:57 pm:
" And the doctor says to the patient who has just suffered a heart attack, "You need open heart surgery, but we're just going to put you on life support instead." "

 No bail wrote on November 19, 2008 1:04 pm:
" Ben Nelson is simply wrong on this issue. These companies have been completely mismanaged for years. Further, the contract with the UAW is simply laughable. There are plenty of people in Nebraska that have the same production skills as most autoworkers but are working for a third of the compensation. If you think that is fair then you too probably support the bailout. If not, email the Senator and express your opposition to simply throwing taxpayer money into the abyss. "

 let them go wrote on November 19, 2008 1:37 pm:
" Welcome to competition Detroit. If you can't compete then get off the field. "

 Wheres my Bail out wrote on November 19, 2008 2:06 pm:
" Ben’s answer has a few critical loop holes. Wouldn't it be wiser to develop an alternative fuel before we build automobiles that run only on alternative fuel?
The auto manufacturers need to fail, file for bankruptcy, renegotiate the ridiculous labor contracts and start from fresh. Having the federal government get involved is NEVER the answer when it comes to WISE business practice/decisions. "

 Pay Attention wrote on November 19, 2008 2:16 pm:
" God bless the Unions. Stop blaming them for inept managment by billionaires. Power to the People! "

 Pie in the Sky wrote on November 19, 2008 2:25 pm:
" The auto makers have dug their own hole. It is not up to us to give them what they want. These so called experts have managed to get themselves broke more often than anyone else. Let them collapse and maybe we can get a fresh start on car economics. "

 No Way wrote on November 19, 2008 2:39 pm:
" Did you hear the one about the auto industry executive that got off his corporate jet holding out a tin can? "

 Taxpayer wrote on November 19, 2008 2:54 pm:
" Dear Senator Nelson: Please give the auto industry your salary and retirement if you think they should be a bailout. "

 Of course wrote on November 19, 2008 3:00 pm:
" the dems have to support this - the union got them and Obama elected now they have to return the favor. I am with WELL .... declare chapter 11, have the BK judge re-write all the contracts include the auto workers, who have been over paid for YEARS, and make it or break it themselves. Why should every day people who work for normal wages of $7-15 dollars per hour, support those who may lose their pensions, or may loose their jobs after years of earning $70+ per hour? Those people should have saved their money and should NOT be depending on my and my children to support their sorry butts. They bought into the union and look what it got them - union's break company's and at this point they are not even offering concessions to these auto companies - just standing in line with their hands out - give me a break!

I will agree with a bail out when they cut their average wage per hour for the 10 year employee back to $25 per hour (and pro-rate the others accordingly) which is still higher than most of us on the street make - and any politicians who votes other wise should be sent back to their home state ... remember folks - politicians don't pay taxes like the rest of us - so they are in NO danger of having to pay these funds back when the auto makers fail after the bailouts!! CALL and EMAIL your representatives and tell them to vote NO! If we don't speak NOW, we have no reason to complain later - if we don't stop this, who is going to!

The american voter should be OUTRAGED - this bail out is at this point costing each citizen $.10 per hour - imagine the total bill for our children!! This is NUTS!! "

 Nissan rules wrote on November 19, 2008 3:14 pm:
" When you make a bad product, you lose business. That is how the system works. I will drive a Honda, Toyota, or Nissan any day of the week. They last longer, have better resale value, and are just all around better cars. It has nothing to do with SUV's either. I love Nissan's new line of SUV's "

 Of Two minds wrote on November 19, 2008 3:32 pm:
" I have two minds about this. There are a lot of jobs on the line that if they are allowed to go bankrupt, would lead these companies to layoff a large segment, it could further lead to other companies that have dealings with them to also layoff people.
I also think the original Rescue plan for the banks and other companies is flawed, when they go about parting with 385,000 dollars I start to question if that company should be included in this "Rescue" Plan.
If we do attempt to "Rescue" these companies regulations should be put in place about HOW the money is to be used. "

 No do you people see.. wrote on November 19, 2008 3:43 pm:
" what unions do to companies? Let them file chapter 11. The auto industry did this to themselves. No advancements on engines, agreeing to greedy insane union contracts and kissing the oil companies butts. This is a perfect example why unions are bad and the biggest thing I have against Obama(otherwise I am all for him). "

 Big D wrote on November 19, 2008 3:46 pm:
" I can't think of a time when Ben was right about anything. "

 Matt wrote on November 19, 2008 3:54 pm:
" Maybe if there weren't so many Detroit made suv's on the road I would actually feel more sympathy for them. Plus, we all know that foreign cars on average will have a longer life. "

 Kevin wrote on November 19, 2008 4:47 pm:
" You can send Senator Nelson your thoughts here:http://bennelson.senate.gov/contact/email.cfm "

 Cody Boettcher wrote on November 19, 2008 5:05 pm:
" They need bankruptcy with UAW and a bailout would be union welfare. The government should not be involved and if they have to only setup a third party warranty on vehicles for a price. Establishing a government owned third party guarantee, which isn't good because our government has no place in private businesses but may be necessary in the SHORT term. And after a short period, migrate back to the Big 3 or other 3rd party to establish confidence. Again, I don't believe in this at all, but this seems to me as the only way the government should be leaning. "

 sean wrote on November 19, 2008 7:36 pm:
" As a local business owner who has had their own ups and downs looking at this current crisis, I am disgusted with the way we are bailing everyone out. Businesses and banks that made poor decisions need to fold. Prolonging what is going to happen eventually with tax payer money is really stupid. We are going to be in a world of hurt after we use all our money and bail everyone out. These auto makers need to file chapter 11, get restructured and make sure they align themselves with the proper tools to succeed not fuel their mistakes by giving them more money. Bankruptcy does not mean complete job loss, chapter 11 is just restructuring. The world is not ending and we do not need to bail these people out, if we continue too we may be in big trouble. "

 Galen wrote on November 19, 2008 7:54 pm:
" Sure management (or MIS-management) is partly to blame.
Unions must shoulder a HUGE part of the blame, also. To high of wages for little work, to high benefits and a choke-hold on many companies. End union rule, end high exec payouts and some type of "bail-out" might be warranted. Keep the unions and the status quo - FORGET IT. "

 Josh wrote on November 19, 2008 9:01 pm:
" I spent some time on the phone this afternoon after reading this article the first time, and I thought that the conversation should be shared:

Senator Nelson's office stated that he does not have an official stance on the issue - but the gentleman did state that it was better to avoid job loss than watch these companies die on the vine. We went back and fourth about what exactly giving them money in exchange for government control of certain aspects of their business model. When I asked why he favored such a radical departure from capitalism, he said that avoiding job loss was not a departure form capitalism, and that giving them money with specific stipulations for government control - but that didn't mean the government would control their business model. When I asked what they would do to ensure they corrected the problems that brought the need for this bailout, he said again that they money would come with certain stipulations that they fix their poor performance in the past. Again, I said that sounded like government control of a private business - he said no. We ended the call with agreeing that we were not reading from the same sheet of music. Senator Ben Nelson's staff is the symbol of what's wrong with this country - they just don't get that they are the ones that are relaying the wishes of those he has been charged to represent in the Senate - not relaying their personal translation of how the world goes around. "

 Lincoln Taxpayer wrote on November 19, 2008 9:33 pm:
" I can see both sides and I'm not sure which way is better. I have a hard time seeing where giving companies loans/bailouts will make them make better business decisions, which is the reason their in this position. On the other hand, if they go thru bankruptcy, all the smaller businesses around the country that are vendors to the big 3 will be left holding the bag. "

 JT wrote on November 19, 2008 9:50 pm:
" Ummm...nice picture Journal star, is he Darth Vader. I agree with aid for automakers but there needs to be MAJOR restructuring. If a football team lost every game for three years you would fire the coach right? "

 Sane wrote on November 19, 2008 10:27 pm:
" Where does the bailout end? If the automakers get their bailout, then the airlines will want one, and the utility companies, and so on and so on... It's a vicious cycle that will cost us more than money. Here's a thought, forget the bailout for private companies, give each adult $200,000 and let them payoff mortgages, buy cars, and clear out their debts. I'm guessing many will even have more than a little to stimulate the economy as well. "

 Comm UnSense wrote on November 20, 2008 8:39 am:
" Saw on the news this morning that the CEO's flew to DC in their private jets to attend the senate hearings. However, none of the 3 would comment on that. Get your houses in order before you come begging for money from the taxpayers. Sell the fleets jets, cancel bonuses, fire some executives and renegotiate the union contracts first. At least act like you have some sense. "

 Union wrote on November 20, 2008 10:26 am:
" Blame the Unions? I got news for you this is not the Union's fault.

I can't believe all these posts that apparently want big business to keep stepping on the heads of working Americans, and would rather have them pay $7 an hour to illegals than to straighten out these billionaire CEOs. "

 Both Ways wrote on November 20, 2008 10:47 am:
" Everyone needs to remember their opposition to this bailout the next time Nebraska is in a drought and demanding assistance for agriculture from Washington. You can either run a successful business and plan for hard times or you don’t, but you can’t have it both ways. "

 Farmers daughter wrote on November 20, 2008 12:02 pm:
" How is a nature made disaster comparable to a company failure due to mismanagement? "

 re Josh wrote on November 20, 2008 1:05 pm:
" Thanks for sharing the conversation. I know of someone who had an e-mail exchange with Ben on the first bailout package, and he didn't reply to the concerns too well (at all for that matter). As a conservative who has voted for Ben every election, I can now say next time I won't be voting for him, Washington has gotten the better of him. "

 Ben needs to spend a little wrote on November 20, 2008 6:08 pm:
" more time home in Nebraska and remember who voted him into office. I think he has been fratinizing with too many Washington types and forgets that the people of Nebraska beleive in taking care of ourselves without the government's intrusion. He needs to stop and remember what is like to live in a small town, like McCook where he lived where his first 18 years of his life. Small town Nebraska values will get you further than Washington bailout values. We don't want government to be in contol of everything in our lives: car manufacturing, banking, healthcare, and also lawmaking. That would make our government socialistic instead of how our Constitution specifies: less government for the people, by the people. "

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