UAW: TARP is 'only resolution'
United Autoworkers union calls on Bush administration to use funds from the $700 billion Wall Street bailout to save the auto industry.
NEW YORK (CNNMoney.com) -- The United Auto Workers union said it is encouraged by the White House's decision to consider rescuing troubled auto companies by using funds set aside to bail out Wall Street.
"We do appreciate the positive statement that was released by the White House this morning that says they are reviewing all options that are necessary -including the Troubled Asset Relief Plan - to help the industry," said UAW President Ron Gettelfinger.
A legislative plan to provide $14 billion in stopgap loans died in the Senate late Thursday night. On Friday morning, the Bush administration -- shifting its long-held view -- said it might use its authority to give automakers their bailout from the $700 billion TARP funding.
Gettelfinger said the auto industry remains in peril, and criticized the government for being slow to react. He lambasted Senate Republicans for rejecting what he said was a bipartisan restructuring of the auto industry that the UAW agreed to.
"Now, the only resolution is for Treasury to use TARP funds," Gettelfinger said. "UAW calls on Secretary of the Treasury Paulson or the Federal Reserve to use their authority to prevent the imminent collapse of auto companies and the devastating consequences that would follow."
Gettelfinger said he did not know how much money the Bush administration might release from TARP or what conditions would be associated with it. He added that he didn't believe the White House would tie any strings to the money, but said regardless, "The money must be released as quickly as possible."
Republicans in the Senate blamed the autoworkers' union for the bill's failure. The GOP said its hang up centered around UAW's refusal to put employees at U.S. auto manufacturers at "parity pay" with U.S. employees at non-union plants operated by foreign automakers in the United States.
Currently, union workers at U.S. automakers make about $3 to $4 per hour more than the non-union U.S. employees of foreign automakers like Toyota (TM) and Honda (HMC), according to the Center for Automotive Research.
The benefit costs are significantly greater for U.S. automakers, though, because they have to pay health care costs for hundreds of thousands of retirees.
The union agreed to close much of that gap in the 2007 labor agreements by shifting responsibility for retiree health care to union-controlled trust funds. But those changes won't take effect until 2010.
Gettelfinger ripped the Senate GOP, arguing many anti-union Republicans tried to doom the resolution, seeing it as a kowtow to organized labor. He said many of the stipulations Republicans demanded placed an unfair burden on the workers but not on any of the auto companies' other interested parties.
"We were prepared to make sacrifices, but we could not accept the efforts of the Republicans in Congress to single out workers and retirees," the UAW president continued. "All stakeholders had to be willing to make sacrifices. We were on third base, and the other stakeholders were not even in the ballpark."