Democrats’ Auto Industry Bailout Is A UAW Bailout, Group Says

Thursday, November 13, 2008
By Susan Jones, Senior Editor


(CNSNews.com) – Rep. Barney Frank (D-Mass.) reportedly plans to unveil a $25-billion auto industry bailout plan next week, on Tuesday, Nov. 18.

Frank, the chairman of the House Financial Services Committee, is writing a bill that would allow the auto industry to get some of the $700 billion intended to restore liquidity in the nation’s financial markets.

But a union watchdog group says Frank’s plan really is intended to bail out the United Auto Workers union.

Frank's legislation would allow the U.S. government to take an equity stake in the auto companies in exchange for the taxpayer loans, the Associated Press quoted Frank's spokesman, Steven Adamske, as saying.

"A collapse of the American automobile industry would be the worst possible thing that could happen at a time when we are already weakened," Frank told reporters on Wednesday.

"We're not asking the taxpayers to throw good money after bad," Frank said. There will be "protections about getting it repaid," he said. "The consequences of not doing it will be worse." Frank did not divulge details of the bill.

General Motors, Ford and Chrysler are lobbying Congress to approve the bailout, the Associated Press reported. The auto industry has been hard-hit by the recession and the credit crunch.

GM, the nation's largest automaker, has warned it could run out of cash by the end of the year without taxpayer help.

‘UAW bailout’

It is a mistake to use part of the $700-billion rescue package to reward high-tax, non-right-to-work states such as Michigan, says Peter Flaherty, President of the National Legal and Policy Center (NLPC).

“The automaker bailout is actually a UAW bailout,â€