GM and Chrysler informed Congress they could run out of cash in weeks. We are about to find out how many weeks they meant. The bailout bill had passed in the House of Representatives, but Senate Republicans wanted further modifications made to the bill. The collapse of the bill came after talks broke down with UAW officials. The sticking point was wages. The US Senators called for steep reductions to take effect in 2009, calling on the UAW to put US autoworkers pay on par with its Japanese competition.Ã‚Â
The UAW appeared willing to concede to this request, but not until 2011-when the current union contract is set to expire. The Senate wanted to see all participants take drastic, immediate cuts. The UAW’s desire to wait until 2011 assured that reluctant Senators would vote on to the bill.
Daily news reports cited the devastating effects a collapse of the Big Three would have on an economy already in recession, experiencing record levels of jobs losses and real estate foreclosures. Yet in a Marist poll, the majority of Americans were not in favor of bailing out these companies.Ã‚Â
Here is my take on why-
1. The average American is already “bailout weary”. Bailing out the finance sector dominated headlines and news programs on an hourly, even minute-by-minute basis. When the Big Three came asking for money, the reaction was “Who now? And who’s next?”Ã‚Â