My state's Senator, Bob Corker, came up with a union-busting alternative to the auto bailout. Negotiations over the alternative, which actually had some decent provisions regarding bondholders, collapsed tonight. The sticking point was the timing of UAW wage cuts; Corker wanted 2010 and the UAW (and Dodd) wanted 2011 when the contract runs out.
I have mixed feelings about the bailout. I loathe the Big 3 and have avoided American cars for a long time. But I hate union busting Southern politicians more.
Make no mistake, people like Corker are like the old Raj of Colonial India. The modern South is, for all intents and purposes, a Colonial region.
In the post-Civil War days of the New South the South essentially became a colony of Northern industrialists. Atlanta Constitution editor Henry Grady welcomed Northern industrial investment. The city of Birmingham became the Pittsburgh of the South. But the selling point was cheap labor.
ALCOA, the aluminum company even set up a full company town right here in East Tennessee. The town is still called Alcoa, and was a model for colonial-style Northern towns in the South - an ironic side effect was Alcoa's insistence on racial equality in housing, despite Tennessee's customs to the contrary.
After World War II the colonial economy continued. Northern industries moved plants to the cheap labor, anti-union, cheap land, unregulated South. With tax free benefits these companies bankrolled a rejuvenated Southern GOP and contributed nothing to local coffers.
Since the 1980s the South started courting Japanese carmarkers (South Carolina actually began with German carmakers in the 1960s). Here in Tennessee Nissan has its American headquarters. Volkswagen is building a new plant in Corker's home town of Chattanooga. Many suppliers, like Denso, are based here in Maryville and across the state.
The irony here is that Volkswagen chose Chattanooga not just because of the cheap labor, but because Chattanooga is just a much nicer place to live now than in the past. And much of that is because of public investment in downtown museums. Corker was mayor of Chattanooga for much of that - he should know better than to suggest that union pay scales are the only reason carmakers locate where they do. But he and his idiot minion Zach Wamp are fixing to take the Governor's chair in 2010 and they want all the anti-union corporate money.
What happens from here is anyone's guess. Unless they reconvene tomorrow and try for another bailout compromise, GM will go under. The GOP will and should take the blame.
UPDATE:
The latest talk is that Bush could use the TARP money and apply it to the auto industry. Bush has refused to do so far and is still not saying that it will go that route. But the White House and Paulson do still have that option.
Of course, there is the question of how that money is allocated and the extent of strings attached.