A bailout too far
Senate Republicans who killed an auto industry bailout must have had a particularly nasty sense of deja vu. If they didn’t get on board, the economy would collapse. “For the hundreds of thousands of people whose jobs depend on this industry, this will not be joyous season,” bellowed Sen. Chris Dodd. It was up to the Republicans. To save Detroit, all they had to do was sign over a fraction of what they’d agreed to for Wall Street.
It wasn’t as if there was another industry waiting in the wings, ready to head to Washington demanding a bailout as soon as the automakers got theirs. So the Republicans couldn’t have feared yet another dollop of largess around the corner. Ultimately, it came down to good old lefty Union vs. rightly Republicans arguing over when workers would agree to take pay cuts.
Has the countdown begun to industrywide bankruptcy? That’s what the automakers say — because of their shared suppliers and vendors, the failure of one Detroit automaker could drag down the other two, as well as other businesses. GM, Ford and Chrysler employ nearly 250,000 people directly, and 100,000 more jobs at parts suppliers could hang on their survival. The companies say one in 10 U.S. jobs is related to the auto sector.
Rebellious Republicans argued that the White House, which favored the bailout, had become irrelevant. After all, the new president takes office in just over a month, making George W. Bush about as lame as a duck sunning on a Fort Lauderdale beach.
Attention is now turning to the Treasury Department’s tattered TARP program, and whether Hank Paulson will do an about-face and throw Detroit a lifeline from what’s left of the $700 billion rescue program for the financial industry. Could Bush’s grand finale be to thumb his nose at his own party and keep hundreds of thousands of people working through Christmas?
Deals of the Day:
* Germany’s Daimler signed a $250 million deal to acquire a 10 percent stake in Kamaz, Russia’s largest truck maker, executives from Daimler and Kamaz told a joint news conference.
* Britain’s Brulines Group said it had completed the acquisition of Vianet from the administrators of Vianet Group for an undisclosed sum.
* South Korea’s retail giant Lotte Group said it was in the bidding for Doosan Corp’s spirits-making division, in a deal reportedly worth up to $500 million, as it looks to beef up its liquor business.
* KB Financial, which runs South Korea’s top retail bank Kookmin, has sold a 3.2 percent stake in itself near the bottom of an offer range for $300 million, three sources with knowledge of the sale said.
(Photo: Reuters/Carlos Barria)