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Gallegly Votes Against Union Protection Plan, Taxpayer Abyss

Press Release

Location: Washington, DC

Congressman Elton Gallegly today voted against the automaker bailout bill.

"This bill does not require union members or union leaders to cut pay or benefits. It sets up an auto czar with unlimited control over the American auto industry and with no congressional oversight. It requires a plan to restructure instead of requiring the Big Three to actually restructure and become competitive expeditiously. It also provides federal loans with no collateral for the taxpayer," Gallegly said. "It is poorly conceived and instead of saving the American auto industry, it dooms it.

"The labor unions have priced American workers out of the competitive market. As long as foreign car makers can assemble a car less expensively than American auto makers, foreign companies will sell more cars. No one likes to talk about a pay cut for American workers, but the alternative is to lose the jobs altogether. First, the union bosses should be forced to take pay and benefit cuts, and union dues should be reduced and returned to the workers to lessen any pay cuts they would have to endure," Gallegly said.

"This is a union protection plan. It alone dooms the American auto industry because it places the unions—which are a large part of the problem—outside of the solution," Gallegly said.

In addition, the auto czar created by the bill would be appointed by the President and would not be subject to confirmation or oversight by Congress. The bill allows the czar to decide what he or she likes about the auto makers' restructuring plan and gives the czar complete authority to accept or reject the plan. Only if the czar rejects the plan would it come back to Congress.

The bill requires the auto makers who take part in the plan to submit their restructuring plan by March 31, 2009, instead of requiring them to actually have the restructuring plans in place by March 31. Some industry executives have suggested in public statements that the companies could be competitive by 2012.

"This guarantees the auto makers will be back asking for more bailouts for at least another three years with no benchmarks or deadlines for them to actually restructure," Gallegly said. "This is not in the best interest of the car makers, the workers or the taxpayers."

While the plan calls for the American taxpayer to obtain stock in any auto maker that takes part in the bailout, the stock would be worthless if the auto makers fail, which is guaranteed by this plan, Gallegly said.

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