Ensign ‘very skeptical’ of auto industry bailout

By Lisa Mascaro

Monday, Dec. 8, 2008 | 4:29 p.m.

WASHINGTON — Nevada Sen. John Ensign remains “very skeptical” of plans to rescue the Big Three automakers as negotiations continued this afternoon between Congress and the White House to supply the companies with as much as $15 billion in loans.

Ensign believes that labor costs at GM, Ford and Chrysler need to be cut back and shaped more like those of their non-unionized competitors overseas. Company pensions, he believes, also need to be reconsidered.

“He needs to see something that addresses their long-term solvency,” said Ensign spokesman Tory Mazzola.

“He’s skeptical, very skeptical,” said Mazzola. “The root problem is, they don’t have a business model that can compete.”

Lawmakers were arriving in Washington today for the final week of this session of Congress, with the auto industry bailout as job one.

Nevada’s delegation faces a potentially tough vote, similar to the $700 billion Wall Street bailout in October that was unpopular with voters.

Ensign’s office said that most of the calls on this topic are coming from those opposing taxpayer aid for the Big Three.

The draft proposal would provide loans to the companies, which would then have until March 31 to present viable business plans to a newly-created oversight panel in the executive branch. The funding could be halted at any point, and must be repaid.

Democrats gave a major concession last week by allowing the money to come from a clean energy fund, but the talks continued this afternoon as details about labor and other concessions were debated.

Even though the auto industry does not have a large presence in Nevada’s labor market, the experts say allowing the companies to go belly-up could cause devastating ripple effects in the U.S. economy where as many as one in 10 jobs are tied to the industry.

Ensign, however, remains concerned that the loans will not put the companies on a viable path forward and may just "throw money at the problem," his spokesman said.