A new Senate star emerges from the auto row

Tom Curry National affairs writer • Profile • E-mail

WASHINGTON - 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.

Video   Fixing the ‘Detroit Three’ Dec. 2: Sen. Bob Corker, R- Tenn. discusses the fate of the Detroit auto companies. CNBC

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.

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