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Examining the State of the Domestic Automobile Industry—Part I S. HRG. 110–876 EXAMINING THE STATE OF THE DOMESTIC AUTOMOBILE INDUSTRY—PART I HEARING BEFORE THE COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS UNITED STATES SENATE ONE HUNDRED TENTH CONGRESS SECOND SESSION ON EXAMINING THE STATE OF THE U.S. DOMESTIC AUTOMOTIVE INDUS- TRY AND ITS OVERALL IMPACT ON THE NATION’S ECONOMY, THE AUTOMOTIVE WORKERS, AND THE COMPANIES INVOLVED IN THE SUPPLY CHAIN AND THEIR EMPLOYEES NOVEMBER 18, 2008 Printed for the use of the Committee on Banking, Housing, and Urban Affairs ( Available at: http://www.access.gpo.gov/congress/senate/senate05sh.html U.S. GOVERNMENT PRINTING OFFICE 50–418 PDF WASHINGTON : 2009 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001 VerDate Nov 24 2008 11:12 Sep 22, 2009 Jkt 048080 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 L:\HEARINGS 2008\11-18 EXAMINING THE STATE OF THE DOMESTIC AUTOMOBILE IND COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS CHRISTOPHER J. DODD, Connecticut, Chairman TIM JOHNSON, South Dakota RICHARD C. SHELBY, Alabama JACK REED, Rhode Island ROBERT F. BENNETT, Utah CHARLES E. SCHUMER, New York WAYNE ALLARD, Colorado EVAN BAYH, Indiana MICHAEL B. ENZI, Wyoming THOMAS R. CARPER, Delaware CHUCK HAGEL, Nebraska ROBERT MENENDEZ, New Jersey JIM BUNNING, Kentucky DANIEL K. AKAKA, Hawaii MIKE CRAPO, Idaho SHERROD BROWN, Ohio ELIZABETH DOLE, North Carolina ROBERT P. CASEY, Pennsylvania MEL MARTINEZ, Florida JON TESTER, Montana BOB CORKER, Tennessee SHAWN MAHER, Staff Director WILLIAM D. DUHNKE, Republican Staff Director and Counsel AMY FRIEND, Chief Counsel MARK OESTERLE, Republican Chief Counsel DAWN RATLIFF, Chief Clerk DEVIN HARTLEY, Hearing Clerk SHELVIN SIMMONS, IT Director JIM CROWELL, Editor (II) VerDate Nov 24 2008 11:12 Sep 22, 2009 Jkt 048080 PO 00000 Frm 00002 Fmt 0486 Sfmt 0486 L:\HEARINGS 2008\11-18 EXAMINING THE STATE OF THE DOMESTIC AUTOMOBILE IND CONTENTS TUESDAY, NOVEMBER 18, 2008 Page Opening statement of Chairman Dodd .................................................................. 1 Opening statements, comments, or prepared statements of: Senator Shelby .................................................................................................. 4 Senator Johnson ............................................................................................... 5 Senator Enzi ..................................................................................................... 6 Senator Schumer .............................................................................................. 7 Senator Bunning ............................................................................................... 8 Senator Carper ................................................................................................. 9 Senator Dole ...................................................................................................... 10 Senator Menendez ............................................................................................ 11 Senator Corker .................................................................................................. 12 Senator Brown .................................................................................................. 13 Senator Allard ................................................................................................... 15 Senator Casey ................................................................................................... 15 Senator Bennett ................................................................................................ 17 Senator Tester .................................................................................................. 18 Senator Martinez .............................................................................................. 19 Senator Bayh .................................................................................................... 20 Senator Crapo ................................................................................................... 22 WITNESSES Debbie Stabenow, a U.S. Senator from the State of Michigan ............................ 24 Ron Gettelfinger, President, International Union, United Automobile, Aero- space, and Agricultural Implement Workers of America .................................. 29 Prepared statement .......................................................................................... 78 Response to written questions of: Senator Shelby ........................................................................................... 109 Alan R. Mulally, President and Chief Executive Officer, Ford Motor Company 31 Prepared statement .......................................................................................... 81 Response to written questions of: Senator Shelby ........................................................................................... 110 Robert Nardelli, Chairman and Chief Executive Officer, Chrysler LLC ............ 32 Prepared statement .......................................................................................... 87 Response to written questions of: Senator Shelby ........................................................................................... 112 G. Richard Wagoner, Jr., Chairman and Chief Executive Officer, General Motors ................................................................................................................... 34 Prepared statement .......................................................................................... 90 Peter Morici, Professor, Robert H. Smith School of Business, University of Maryland ............................................................................................................... 37 Prepared statement .......................................................................................... 105 Response to written questions of: Senator Shelby ........................................................................................... 113 Robert A. Ficano, Wayne County Executive, Detroit, Michigan Prepared statement .......................................................................................... 106 (III) VerDate Nov 24 2008 11:12 Sep 22, 2009 Jkt 048080 PO 00000 Frm 00003 Fmt 5904 Sfmt 5904 L:\HEARINGS 2008\11-18 EXAMINING THE STATE OF THE DOMESTIC AUTOMOBILE IND VerDate Nov 24 2008 11:12 Sep 22, 2009 Jkt 048080 PO 00000 Frm 00004 Fmt 5904 Sfmt 5904 L:\HEARINGS 2008\11-18 EXAMINING THE STATE OF THE DOMESTIC AUTOMOBILE IND EXAMINING THE STATE OF THE DOMESTIC AUTOMOBILE INDUSTRY—PART I TUESDAY, NOVEMBER 18, 2008 U.S. SENATE, COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS, Washington, DC. The Committee met at 3:02 p.m., in room SD–538, Dirksen Sen- ate Office Building, Senator Christopher J. Dodd (Chairman of the Committee) presiding. OPENING STATEMENT OF CHAIRMAN CHRISTOPHER J. DODD Chairman DODD. The Committee will come to order. If I had known the interest, I would have held this at RFK. Well, listen, thank you all for coming this afternoon, and I appre- ciate the participation of our witnesses and our colleagues as well. Momentarily, we will be asking our colleague Senator Stabenow to share some opening comments. I would point out that Carl Levin, the senior Senator from Michi- gan, is unable to be with us this afternoon, but has submitted testi- mony and obviously has a very strong interest in this subject mat- ter. And I have had numerous conversations with him over the past number of days, and so we appreciate his contribution to this afternoon’s proceedings as well. Let me just briefly say how we are going to proceed here. I am going to make some opening comments. My friend and colleague from Alabama will make some opening comments, and then I will ask my colleagues here if they would please be brief, if you could. I know everyone wants to be heard on this subject matter, at least a couple of minutes. We will then turn to you, Senator Stabenow, and then we will invite our witnesses up for their testimony here this afternoon. This afternoon’s hearing is on ‘‘Examining the State of the Do- mestic Automobile Industry.’’ This afternoon the Committee exam- ines the condition of this important domestic industry to our coun- try, and I want to thank Senator Shelby and our other colleagues for accommodating their schedules to allow us to have this hearing scheduled on such short notice. And although we may have dif- ferent views on the ailments of the auto industry and the remedies for them, I think we can all agree that its fate is a very important subject matter for this Committee’s consideration. Our Banking Committee jurisdiction, I would point out to those who may not be aware, extends to matters pertaining to economic stabilization and financial aid to commerce and industry. As such, today’s hearing is very timely and appropriate. (1) VerDate Nov 24 2008 11:12 Sep 22, 2009 Jkt 048080 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 L:\HEARINGS 2008\11-18 EXAMINING THE STATE OF THE DOMESTIC AUTOMOBILE IND 2 The automobile industry, of course, has made an urgent request, as we are all aware, that Congress provide some emergency assist- ance to their companies. Without that assistance, we are told that one or more of the Big Three automobile makers could become sig- nificantly impaired or collapse altogether. Were that to happen, the repercussions, of course, would be severe. Hundreds of thousands of
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