It's North vs. South in Big Three bailout fight

As he tried to round up support for the Big Three loan, Levin told reporters, “There is strong support for bridge loans for the auto industry because of the huge impact of a collapse of the domestic auto industry for almost every state and on the economy as a whole.”

When a reporter pointed out that some critics want the United Auto Workers to make more concessions in pay and benefits, Levin said, “Take a look at what the unions have already done,” but he acknowledged that “there’s a lot of people who want the unions to give more back.”

Levin and other Big Three allies must figure out whether there is sufficient support for “carving out” $25 billion for the Big Three from the $700 billion Troubled Asset Relief Program or whether to use a provision in an energy bill Congress passed this year that is designed to help the domestic auto industry retool and shift to alternative fuel and hybrid vehicles.

A relatively small loan
Levin said $25 billion is a relatively small amount in the context of the financial industry's problems. He noted the amount is just 4 percent of the $700 billion Congress allocated to the financial industry and one-sixth of what the government has shelled out to keep troubled insurance giant AIG afloat.

And Levin said Honda, operating in Alabama, “has cheaper labor, younger labor, no legacy costs (for retiree health care) — younger work force means lower medical costs. They have certain competitive advantages that are not the result of brilliance or greater skill.”

He added that “there are supplier companies in at least half the states that would be really harmed by bankruptcy of the Big Three — including suppliers that supply to some of the transplants like Hyundai and Nissan.”

But Levin faces skeptics like Sen. Bob Corker, R-Tenn., who grilled the Big Three executives at Tuesday's hearing.

Corker is in a similar position to Bunning: his state has both a GM plant and a Nissan plant.

Corker is opposed to a blanket bailout for the Big Three. “If we we're going to fund, and I’m not yet in favor of that, if we were doing this prudently, what we do is fund the ones that were going to succeed. Each of them is in very different circumstances.”

He added, referring to the GM plant in Tennessee, “If I were to look at it only parochially, I would say the GM plant in Tennessee is very competitive. … My sense is it would be one of the survivors.”

Bankruptcy and reorganization “could possibly be better for them," he said, because they would be able to get out of some of their legacy costs.

A so-called prepackaged bankruptcy, which would be prepared in concert with creditors, “would allow these companies to take the strengths they have and carry on and shed the weaknesses they have,” Corker said.

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