Sen. Brown wants to help Detroit's Big Three

SANDUSKY If you think the recession seems bad now,
Tom Jackson
May 24, 2010

 

SANDUSKY

If you think the recession seems bad now, what until you see what happens if Detroit’s Big Three automakers are allowed to collapse, U.S. Sen. Sherrod Brown warns.

“This recession will turn much worse if the auto industry goes bankrupt,” the Democratic lawmaker told Ohio reporters in a conference call Wednesday.

“I don’t know if there will be a depression. I don’t want to find out.”

Brown said he strongly backs providing a $25 billion loan to Ford, Chrysler and General Motors to allow them to get through the financial crisis.

That would be in addition to the $25 billion loan the carmakers already are slated to receive to help them switch to making cars with better gas mileage.

Brown said while the proposed loan doesn’t provide direct aid to auto parts suppliers, it’s vital to keep parts makers afloat in Erie County and other parts of Ohio.

“Inaction on this proposal would mean the auto parts companies are in big trouble,” Brown said.

The senator said equally important is extending unemployment benefits.

If the proposal Brown backs is approved, workers who have seen their benefits run out would get at least an extra seven weeks, although workers in high unemployment states such as Ohio would get an additional 13 weeks.

That would be good news not only for the workers but for local communities, Brown said.

“The local hardware dealer and the local grocery store can see more dollars in the community and stay in business themselves,” he said.

U.S. Rep. Marcy Kaptur, D-Toledo, said Wednesday she also supports the $25 billion loan.

“Despite its current troubles, the U.S. auto industry remains the backbone of U.S. manufacturing, providing more than 100,000 jobs in Ohio alone, not to mention thousands more in dealerships and parts makers,” said Kaptur, whose district includes Erie and Ottawa counties.

U.S. Rep. Bob Latta, R-Bowling Green, needs to see the specifics of any proposals before he can comment on them, said spokesman David Popp. “We’re waiting to see those ideas put to paper,” Popp said.

Brown said if the auto companies filed for bankruptcy protection, they could toss out contracts with UAW locals, removing guarantees for health care and retirement.

“That’s not the American way,” he said.

A critic of the proposed bailout, Daniel Ikenson of Washington’s Cato Institute, said Wednesday it’s unfair to subsidize American nameplates when they compete against other companies with plants in the United States, such as Honda, which makes cars in Marysville, Ohio.

Honda, Toyota and Nissan have done well because they make better cars than American companies, said Ikenson, who said not one of the top five selling cars during any year of the current decade was made by one of the Big Three.

Ikenson said Brown and Kaptur essentially are pushing for a bailout of the United Auto Workers, who Ikenson contends imposed costs that carmakers can’t afford.

Ikenson said if the American car companies filed for bankruptcy, they would able to “rip up the contracts of the UAW and start over, if they’re even going to deal with the UAW at all. Labor needs to realize they cannot suck the life blood out of their producers.”