U.S. Senator Tom Coburn, M.D. (R-OK) today urged the Senate to reject a cash giveaway to the Big Three auto companies - Chrysler, General Motors and Ford - and only allow limited Congressional action after renegotiations of labor agreements.
"The Big Three will not be competitive until their employment costs are comparable to their competitors. The United Auto Workers union and Big Three executives jeopardized the future of their companies by allowing employee costs to cripple their competitiveness. This combined with excessive corporate tax rates will undermine any business plan moving ahead. Additional federal funds will only prolong their need to reorganize and lower costs. Renegotiating labor contracts is the only sensible way forward," Dr. Coburn said.
The average total hourly compensation and benefits per employee for Chrysler, General Motors and Ford in the United States is $73.21 while the average total hourly compensation per employee for Honda, Toyota and Nissan in the United States is $44.20. Moreover, the average salary for jobs that produce goods in the United States is $31.59. Big Three employees receive twice that amount in compensation and benefits.
"The labor rates of the Big Three are out of sync with labor rates across the nation and it is unfair to ask American taxpayers to subsidize poor management decisions. The only acceptable Congressional action would be the possibility of guaranteeing loans after labor contracts are renegotiated," Dr. Coburn said.
"No one in Congress wants to see these companies fail. Nor does anyone want to see workers' displaced," Dr. Coburn continued. "Fair bankruptcy proceedings would allow unsustainable labor contracts to be renegotiated and failed business models to be reorganized. By supporting and overseeing these proceedings, Congress can protect taxpayers, auto workers and auto companies. Decreased labor costs, lower corporate tax rates and an improved product mix will enhance the competitiveness of the American auto industry and keep our nation a leader in the global marketplace."