In a news release issued Nov. 18, Toledo City Councilman Frank Szollosi, chair of Council’s Intergovernmental Relations Committee, said he will ask his colleagues to support an emergency resolution in support of U.S. automakers at the Nov. 18 regular meeting.

The wording of the resolution:

A RESOLUTION URGING PRESIDENT GEORGE W. BUSH AND OHIO’S CONGRESSIONAL DELEGATION TO IMMEDIATELY SUPPORT BRIDGE LOAN TO GM, FORD AND CHRYSLER

WHEREAS, the credit and economic crises that hit the country in September have dramatically altered the situation facing the auto industry. The steep decline in auto sales and revenue have created a crisis for this key U.S. manufacturing industry, and

WHEREAS, without immediate federal assistance, one or more major automakers could be forced to liquidate – creating severe economic consequences for the entire country, and

WHEREAS, Congress is considering an amendment to the $700 billion financial rescue package, to clarify that the Treasury Department should use the existing authority to provide a $25 billion bridge loan to enable GM, Ford and Chrysler to continue operations and avoid liquidation, and

WHEREAS, a liquidation of the Detroit-based auto companies would result in the loss of 3 million jobs, according to a study by the Center for Automotive Research. This includes direct job loss at the three companies, and at auto dealers, component suppliers, and other businesses. There would also be a ripple effect throughout the economies of auto communities across the United States, due to a decline in personal income and tax revenue, felt sharply in Toledo, and

WHEREAS, liquidation will jeopardize pensions and health benefits for one million retirees and their spouses and dependents, and

WHEREAS, the 2005 and 2007 contracts saved automakers billions: Contrary to the assertions by some pundits and editorial boards, the current crisis facing the Detroit-based companies is not due to “overly rich” union contracts. In fact, in the 2005 and 2007 collective bargaining agreements between the UAW and GM, Ford and Chrysler, active and retired workers already stepped forward to make huge concessions, and

WHEREAS, the 2007 contracts reduced wages for new workers by 50%. New workers will not be covered by the traditional retiree health care and defined benefit pension plans. The UAW also agreed that the responsibility for health care benefits for existing retirees would be transferred from the companies to an independent trust, called a Voluntary Employee Beneficiary Association (VEBA) and

WHEREAS, as a result of the 2005 and 2007 contracts, the labor cost gap between the Detroit-based auto companies and the foreign transplants will be largely or completely eliminated by the end of the current contracts. Indeed, some analysts have indicated that GM’s labor costs will now be lower than Toyota’s, and

WHEREAS, the Treasury Department bailouts of banks and investment firms included restrictions on executive compensation, but have never included any cuts in pay or benefits for rank-and-file workers or retirees from financial institutions. Thus, it would be anomalous to impose such cuts on workers and retirees in the auto industry,

NOW THEREFORE BE IT RESOLVED, that The City of Toledo hereby asks PRESIDENT GEORGE W. BUSH and OHIO’S CONGRESSIONAL DELEGATION to immediately support the amendment to the Emergency Economic Stabilization Act (ESSA) to clarify that the Treasury Department should use its rescue program to provide a $25 billion emergency bridge loan to GM, Ford and Chrysler to avoid the devastating consequences their collapse would entail for The City of Toledo and for millions of workers and retirees across the country.

This entry was posted on Tuesday, November 18th, 2008 at 10:42 am and is filed under Breaking News, Wheels.
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