Sen. Corker ‘Stunned’ at UAW Resistance to Lower Labor Costs

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North American Int’l Auto Show

DETROIT – Sen. Bob Corker (R-TN), widely considered public enemy No.1 within the auto industry after opposing legislation last year to provide the Detroit Three with rescue loans, says he is “stunned” organized labor has not agreed to wage cuts making the auto makers more competitive, compared with foreign rivals, and thinks Chrysler LLC needs a merger.

Corker emerged as the sharpest critic of General Motors Corp., Ford Motor Co. and Chrysler during December’s Congressional hearings. Yet he ended up writing 11th-hour legislation that came the closest to sending the federal money to Detroit.

The bill sank because it lacked labor-cost concessions from the United Auto Workers union.

“To be candid, I was stunned, absolutely stunned the UAW leadership would not agree to be competitive,” Corker says, adding he never said union members make too much money. “UAW workers need to be competitive.”

It took action by President Bush to get GM and Chrysler the $17.4 billion in loans they need to stay out bankruptcy and restructure for long-term viability. Terms for the tax-payer funding mandate the auto makers must win the same concessions Corker called for from the UAW before a Feb. 17 deadline.

The senator also was surprised to read criticism from Detroit media over his unsuccessful plan. “I offered a solution. It may have been the only one from our side of the aisle, and it was one people rallied behind.”

Chrysler not investing in technology, says Sen. Bob Corker.

Corker also tells journalists at the North American International Auto Show here he thinks Chrysler needs a merger. GM was in talks last year to absorb Chrysler, but the discussions were shelved so the auto makers could concentrate on their wobbly financial condition. Asked during the hearings if they would combine as conditions of the loans, GM Chairman and CEO Rick Wagoner readily agreed.

“Chrysler probably needs to merge with someone, not go away from the standpoint of a business,” Corker says. “What I’ve looked at, they have not invested in the technology and those kinds of things necessary to be a stand-alone.

“My hope is they will, in fact merge and be a viable part of Michigan and our country,” he adds, noting he most often drove a Jeep during his career in construction.

Corker insists Midwestern attitudes toward the South, where most of Asia’s transplant auto makers operate, are incorrect. The future of the industry depends on success in both regions.

“Suppliers are very important; any interruption of the supply chain” would damage all auto makers, he says.

Corker’s remarks come during a tour of the Detroit show, where GM executives Beth Lowery and Ed Welburn met privately with the freshman senator and then browsed some of the products in the auto maker’s sprawling display.

Accompanied by Lowery, vice president-environment, energy and safety policy at GM, and Welburn, vice president-GM Design, Corker stops to look at models such as the Saturn Vue plug-in hybrid-electric vehicle coming to market in 2010.

Welburn also briefs Corker on the aerodynamic design of the all-new Chevy Traverse and takes time to sit inside the Cadillac Converj, a new concept using the drivetrain from the Chevy Volt extended-range electric vehicle.

“Back to the future,” Corker says of the Converj. “Pretty cool.”

The senator tells Ward’s his goal is to help GM achieve long-term viability, so it can bring vehicles such as the Volt and Converj to the America people.

“This gentleman is working on the future,” Corker says, motioning toward Welburn. “And the goal of our discussions was to get the capital structure of General Motors set up, so they can deliver these vehicles.

“What he’s doing is obviously investing in the future,” Corker adds, acknowledging sales on a per capita basis are at their lowest level in the post-WWII era. “And this requires, obviously, setting the capital structure and costs to fit where (sales) are today.”

He also tells Ward’s he thinks the Environmental Protection Agency may have to rework its fuel-economy analysis to account for cars such as the Volt. “It could get 100 miles (161 km) to the gallon,” he says, echoing an effort by GM to achieve that very rating.

Corker says his attitude toward the Detroit Three has not changed since the hearings. “My goal has been to craft a solution, so these vehicles that we heard a great deal about, and some which are made in Tennessee, have the ability to be sold. But to do that, the capital structure of the company and the competitiveness has to be there.

“The loans to these companies were made around the solutions we offered,” he adds. “I wish we would have done it legislatively. That’s the way it should have been done.”

Corker also reveals his method of transportation to Detroit, as executives from the Detroit Three were chastised by Congressmen for using private corporate aircraft for their first round of hearings.

Says Corker: “I came on Northwest Airlines, and I want you to know they were right on time.”