Corker Decries Auto Industry Bailout, Other Federal Moves

By Bill Dries

For locations, click here.

U.S. Sen. Bob Corker is not only a critic of the federal stimulus package in Washington – he’s also outspoken against the federal bailout of the auto industry, especially since Tennessee is one of the top three states for auto manufacturing.

Speaking at the Shelby County Chambers of Commerce Alliance meeting this month, the Chattanooga Republican said his opposition to the auto bailout has made the industry more attentive when he has questions and concerns. He also remains in close contact with Steve Rattner, the head of the Obama administration’s task force on the auto industry.

“I still believe that the number issue that is important to you and important to our economy is credit,” Corker told the gathering in Cordova. “I thought the stimulus bill that we passed in Washington was not well thought out. … I also thought the Bush stimulus package we passed in May was silly.”

After the speech, Corker talked about that as well as the auto bailout, in particular his decision to oppose a bailout affecting General Motors, which operates a Saturn plant in Spring Hill, Tenn.

“If these decisions are made based on the plants that are the best assets to General Motors, then I’m convinced that Spring Hill will survive. … All I’m asking is please don’t let politics enter into these decisions. … Because of our heavy involvement … they give us a heads-up often as to what’s happening – not as it relates to the plants. With Rattner all I’ve asked is keep politics out of the decision-making.

“Obviously, I’ve sort of become public enemy No. 1 as it relates to the UAW (United Auto Workers) as it relates to asking tough questions. But at the end of the day, I ask everybody tough questions … because as a lender, with especially the kind of money we’re going to wind up having in these companies by the time it’s all said and done – you need to ask those tough questions.”

Q: You disapproved of the bailout and government control of the auto industry, but you told this group that you believe the Obama administration is now moving in the right direction?

A: I think that when Americans look back in two years at what’s happened at GM, where, in essence, the White House – the White House – picked up the phone on a Friday afternoon and asked Rick Wagoner (GM chairman and CEO) to step down and asked two-thirds of the board to step down – they’re going to look back on this moment in time and say, “What in the world was happening in our country? That was wrong.” And I have spoken strongly with (National Economic Council Director) Larry Summers and Steve Rattner. That being said, that’s already happened and that’s the way it is. I do think that now, in spite of the fact that they are doing it the wrong way, they are doing the right things. The fact is that they are moving toward, in essence, the Corker plan. They’re doing all of those things.”

Q: Does economic recovery involve changing the degree to which Americans rely on credit?

A: There’s no question that we’ve got to have a regulatory regime in this country that’s a little different than it’s been in the past. We’ve got areas that have been unregulated. We’ve had mortgage brokers that have done ... some unsavory things. I realize we are going to have a different regulatory regime. But what we’ve got to keep from happening is regulating in such a fashion that innovation leaves.

Certainly there will be some changes. But what we need to do is make sure the government backs out of involvement in these financial institutions as quickly as possible. … Before long Congress will be trying to be involved in the types of loans that institutions are making. That’s a bad thing for our country.

We’ve already had a number of community banks that have paid back their TARP money. Goldman (Sachs) wants to pay it back now. My hope is that over the next 18 months we figure out some way of unwinding this. There will be pressure from the other side not to unwind it and actually move forward. That’s going to be one of the major conflicts we’ll be dealing with, I think, in the upcoming year. Right now we’re just trying to survive. But at some point ... we’ll be right in the middle of (a big philosophical debate).”