Sen. Bob Corker of Tennessee proposed a plan for how to bail out the "Little Three" (GM, Chrysler, and Ford) that doesn't suck nearly as much as what the Congressional Democrats and the Bush administration are talking about. Larry Kudlow had a good summary:
Mr. Corker wants a deal where, first, carmakers must restructure all their debt at some price, perhaps 30 cents on the dollar. But the bond owners must be satisfied so the government doesn’t have to pick up the tab. Second, Mr. Corker wants carmakers to get their worker-compensation levels exactly equal to those of the Japanese transplants in Detroit south. That means about $48 total hourly labor costs. GM’s labor costs were $73 in 2006, an estimated $69 in 2008, and are projected to be $62 in 2010. This, of course, includes pension and health benefits. If these two conditions are satisfied, Mr. Corker then believes some kind of government loan might be granted. We’ll have to wait and see where this thing goes.
I suspect it will go nowhere. The UAW, although they've recently offered both meaningful concessions (regarding the "jobs bank") and meaningless gestures ("delays" in retiree benefits funding), aren't about to OK significant permanent labor cost reductions, and that means all their congressional lackeys will completely ignore the Corker proposal.
But good for Sen. Corker for throwing it out there anyway. It would be nice to get an on-the-record up or down vote on this, but I'm not holding my breath.
