Although the weeks of congressional wrangling over the fate of the Detroit automakers ended in a collapsed rescue plan, a new political star emerged from the fray: Tennessee Republican Sen. Bob Corker.
All day Thursday and into the night Corker was in the thick of negotiations in a conference room at the Capitol with Senate Democratic leaders and auto industry representatives to design a compromise measure to assist the car companies.
“We’re still working on it,” Corker told reporters as he left the meeting shortly after 8 p.m. EST. “We’ve got some issues still unresolved, but we all want to try to resolve them.”
But late Thursday night, Corker's efforts ended in frustration.
Democrats would not accept Corker's proposal that the United Auto Workers union agree to a reduction in wages by a specific date in 2009 to reach parity with workers at the “transplants,” the factories in Tennessee and other states owned by Toyota, Hyundai and other foreign car companies
"We offered any date in the year 2009 — any date — any date, just when will we actually get there," Corker said on the Senate floor after his proposed deal collapsed.
“We have solved everything substantively and about three words keep us from reaching conclusion tonight," he said.
Earlier Thursday, Senate Majority Leader Harry Reid had said if negotiators were able to work out compromise based on Corker's proposed bill, "the bill would overwhelmingly pass the Senate."
Corker told reporters Thursday that he had spoken on the phone about his plan to General Motors President Fritz Henderson — whom he simply referred to as "Fritz" — and to executives at Cerberus, the parent company of Chrysler. “They really like it,” he said.
And Senate Democrats? “There’s an openness; there’s potential real momentum right now, and we’ll see,” he told reporters Thursday afternoon as he hustled to a meeting in Reid’s office with a UAW representative.
Unlike most of his fellow Republicans, Corker, a former construction company executive, appeared to see a rescue of the Detroit firms as a fascinating business deal that he was trying to engineer.
Corker had crafted a three-part plan:
- It would have required the two firms closest to bankruptcy, General Motors and Chrysler, to reduce their debt by two-thirds. Bondholders would have “plenty of incentive to make sure that the debt is reduced by two-thirds” or risk losing even more if the firms go into Chapter 11, where their bonds might be further discounted, Corker said. “We’re going to force them into bankruptcy if they don’t do this,” he said bluntly.
- He also would have required that the Voluntary Employee Benefit Association, the entity created by the car firms and the UAW to handle retiree health care benefits, accept stock in lieu of half the cash payments due. The carmakers had agreed to fund VEBA but can no longer afford to do so. “If a company goes bankrupt, these future payments are never going to happen anyway,” he said.
- Finally, Corker’s bill would have forced the UAW to lower its members’ wages to the level of employees at Honda and the other foreign-owned car manufacturers operating in the United States.
The 'three-hump camel'
He called the bill passed by the House Wednesday night "a three-hump camel. You couldn’t make it more ineffective and more complicated.” He added, “The way for us to deal with this is surgically and quick.”
His bill differed from the House bill in not appointing a “car czar” to monitor the industry and in forcing deep concessions on creditors and on the union.
Corker hadn’t held out much hope for his alternative plan as of Monday night.
But then after appearing on "CNBC’s Kudlow & Co.," he dropped by the Senate gym and ran into a fellow Republican senator, “somebody I would have thought, based on the way they’ve voted in the past” would support the House bill.
This GOP member told him, “Look, I can’t support this (House bill).”
“It dawned on me” that there weren’t the 60 votes needed under Senate rules for the House bill to pass and that his alternative might catch fire with some fellow senators, Corker said.
Even though he was elected only two years ago and is the lowest-ranking member of the Senate Banking Committee, Corker made himself a commanding figure in deciding the fate of GM, Chrysler, and Ford.
And he was briskly dismissive of the White House role in negotiating a solution to the automakers’ woes.
“The White House is actually at a point where they’re looking for the next flight out of town on Jan. 20,” he said Thursday.
Folksy, wry, and relentlessly focused on detail, Corker outshined all his GOP colleagues on the Banking Committee and most of his Democratic ones in interrogating the auto industry executives and UAW President Ron Gettelfinger.
Corker’s performance even drew praise from a senior House Democrat with strong ties to organized labor, Rep. Paul Kanjorski, D-Pa.
At last Friday’s House Financial Services Committee hearing at which the three Detroit CEOs presented their restructuring plans, Kanjorski said to them, “I listened intently to the Senate examination yesterday, and I thought Sen. Corker was excellent. And he basically told all of you gentlemen that, from his business perspective, as a businessman — and he personally is a very successful businessman — he's looked at your balance sheets and he said they just don't work.”
He added later, “Mr. Corker, he's a Republican. I'm a Democrat. So understand this is very bipartisan, this discussion. I thought he was absolutely on the ball when he talked about the problem with these companies are they're not real companies…They have to be restructured. They have to have ‘haircuts.’”
Corker got his financial knowhow by starting his own construction company in the 1970s with an initial stake of $8,000. Later he branched out into developing commercial real estate. He was appointed state commissioner of finance and administration and was elected mayor of Chattanooga in 2001.
“He knows what makes businesses successful and unsuccessful, and he makes compelling arguments in clear and understandable terms,” said Whit Ayres, a Republican pollster who worked on Corker’s Senate campaign in 2006.
“He has been extraordinarily effective with fellow senators who share his general perspective but who do not have his detailed understanding of business issues.”