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Auto talks collapse over wages



Published: Fri, December 12, 2008 @ 12:10 a.m.

An adviser for Sen. Voinovich said the matter is now in the hands of the White House.

STAFF/WIRE REPORT

WASHINGTON — A $14 billion emergency bailout for U.S. automakers collapsed in the Senate on Thursday night after the United Auto Workers refused to accede to Republican demands for swift wage cuts.

Senate Majority Leader Harry Reid said he was “terribly disappointed” about the demise of an emerging bipartisan deal to rescue Detroit’s Big Three.

He spoke shortly after Republicans left a closed-door meeting where they balked at giving the automakers federal aid unless their powerful union agreed to slash wages next year to bring them into line with those of Japanese carmakers.

Republican Sen. George V. Voinovich of Ohio, a strong bailout supporter, said the UAW was willing to make the cuts — but not until 2011, when its contract expires. The Detroit-based Big Three automakers each employ thousands in Ohio.

Voinovich senior adviser Chris Paulitz said the issue is now legislatively done and is in the hands of the White House. He said the failure to reach a deal has deeply disappointed the senator.

“He is terribly disappointed. He has worked for a month to come up with some sort of compromise. Now, we have to pray the White House comes up with something to keep these companies afloat,” he said.

Reid was working to set a swift test vote on the measure Thursday night, but it was just a formality. The bill was virtually certain to fail to reach the 60-vote threshold it would need to clear to advance.

Reid called the bill’s collapse “a loss for the country,” adding, “I dread looking at Wall Street tomorrow. It’s not going to be a pleasant sight.”

The implosion followed an unprecedented marathon set of talks at the Capitol among labor, the auto industry and lawmakers who bargained into the night in efforts to salvage the auto bailout at a time of soaring job losses and widespread economic turmoil.

“In the midst of already deep and troubling economic times, we are about to add to that by walking away,” said Sen. Chris Dodd, D-Conn., the Banking Committee chairman who led negotiations on the package.

Sen. Bob Corker of Tennessee, the GOP point man in the talks, said the two sides had been tantalizingly close to a deal, but the UAW’s refusal to agree wage concessions by a specific date in 2009 kept them apart.


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