Fox News Interview - Transcript

Interview

MSNBC - Interview -Transcript

FOX NEWS CHANNEL INTERVIEW WITH SENATOR EVAN BAYH (D-IN)

SUBJECT: AUTO INDUSTRY BAILOUT INTERVIEWER: JON SCOTT

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MR. SCOTT: Indiana Senator and member of the Senate Banking Committee Evan Bayh is with us.

I guess there are some strings attached, though, to your support of this bailout. Can you tell us what they are, Senator?

SEN. BAYH: Well, that's right. And I'm actually not in favor of what you would call a "bailout." That suggests just giving someone money with no conditions. I think if this is going to work, it has to be structured similarly -- in a similar way to efforts in the past. And that is all those stakeholders -- management, shareholders, labor -- all coming to the table and letting us know what kind of sacrifices they are willing to make to make this work in the long run so that the industry is, on a permanent basis, put on a more competitive position.

So that would be the condition that I would have for taking this step, again, not just for the auto industry, but because it would be good for the American economy and, in the long run, for the American taxpayers.

MR. SCOTT: But if you allowed those companies to file Chapter 11 bankruptcy, wouldn't that same kind of thing happen, and might you not get a more efficient outcome?

SEN. BAYH: Well, that is a possibility, but the auto industry may be a little bit different than some other retailers or the auto -- or the airline industry, some others that have gone through bankruptcy reorganization. The reason for that is that an automobile purchase is so significant for the average family -- 20 (thousand), 30 (thousand), 40,000 -- sometimes even more -- dollars. And the warrantys run over a period of time that some surveys of consumer sentiment suggest that up to 80 percent of potential car buyers would not buy from a company that was in bankruptcy because they would not be confident that that company would survive and be there to honor their commitments as a purchaser of a major item like an automobile. So you might actually be self-defeating by forcing them to go through the bankruptcy process.

MR. SCOTT: Twenty-five billion dollars is what they're asking for, right? How long would that last?

SEN. BAYH: Well, only -- only long enough to be successful. Back at the time when Chrysler was helped in 1979, the money was repaid ahead of schedule and the taxpayers actually made a profit. And there are provisions in the proposed agreement here that have the government taking an equity stake in these companies so that if they were successful in being turned -- turned around, the share prices did go up, the taxpayers would not only be repaid, but would once actually make a profit for stepping up and helping these companies at this very difficult time.

MR. SCOTT: We noted there is a lame-duck session about to get under way. You've got to have 60 votes in the Senate to get this thing passed, and as we noted, Republican senators like John Kyl of Arizona, they don't like this bailout idea. It would seem that he would be voting against it. Do you think you have 60 votes?

SEN. BAYH: Well, the smart money in Washington always bets against something happening because of all the built-in checks and balances in the process. So my short answer to you is, if I were betting on this, you'd have to say the odds are less than 50-50 that something will get done this week. But if we can get through to next January, I think the odds are significantly better that something will happen.

And again, I want to mention that, at this particular critical moment for our economy, with so much instability in the financial markets, the real economy turning down, people losing their jobs, adding tens of thousands of more unemployed people, more instability, this is probably not the right time to be doing that. So that's one of the reasons I'm hopeful that something can get done. But to answer your question directly, I think the odds are probably less than 50-50 this week.

MR. SCOTT: Labor costs at GM are said to be about $71 per worker per hour. At Toyota, they are $47 an hour. Doesn't that suggest that there needs to be some monumental shifting in the way these companies are run and the way these employees are compensated before this thing is going to work?

SEN. BAYH: Well, as I suggested, every stakeholder -- management, shareholders, labor -- all need to come to the table and be willing to make some sacrifices for the long-term viability of the industry. My understanding is that in the last contract that was negotiated, labor did come up with some health care savings, and that was a good step in the right direction.

Making some of these comparisons is difficult. When you look at some of the foreign auto manufacturers, their governments provide for the health care costs of their employees, whereas under our system, obviously, that is not the case. With some of the foreign transplants here in our own country, the labor forces tend to be much younger. You don't have the pension costs, some of the health care issues. So some of these comparisons are a little bit apples-to-oranges.

But, to answer your question directly, I think everyone -- shareholders, management, in addition to labor -- do need to come up with some steps to help make these companies long-term viable. Otherwise, we are just throwing taxpayers' money at them, and I don't think that that would be appropriate.

MR. SCOTT: Democratic Senator Evan Bayh of Indiana. Thanks.

SEN. BAYH: Thank you.

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