DETROIT (Reuters) – Tennessee Sen. Bob Corker, who pushed for tough conditions on the U.S. government bailout for automakers, said on Tuesday he hoped that Chrysler LLC would merge to become a viable company.
Corker, who was touring the Detroit auto show and scheduled to meet with U.S. auto executives, also said he was concerned that General Motors (GM.N) might not meet the aggressive restructuring targets set out under the $13.4 billion loan granted to the automaker by the Bush administration.
“That concerns me,” said Corker, a Republican, whose home state includes auto supply operations and the North American headquarters of Japan’s Nissan Motor Co. (7201.T)
“Chrysler probably needs to merge with somebody, not necessarily disappear from the standpoint of existence,” said Corker, who said the automaker owned by Cerberus Capital Management [CBS.UL] was not making the needed investment to remain competitive.
“My hope is that they will in fact merge and be again a viable part of Michigan and our country,” said Corker.
Corker led a group of Southern conservatives during the ill-fated congressional bailout effort, some of whom opposed a rescue while others wanted deeper labor concessions than those proposed by Democrats.
He attempted to broker a last-ditch compromise which faltered on a requirement for accelerating the time frame for bringing wages for unionized U.S. autoworkers in line with scales at some Japanese rivals doing manufacturing in the United States.
The wage proposal and two other labor provisions wound up in the $17.4 billion auto bailout approved by the White House and serve as a baseline for negotiations on bailout-related concessions that began this week between GM and the United Auto Workers Union.
Chrysler was granted $4 billion in emergency loans and has sought another $3 billion.
A proposal to strip the Corker-inspired labor provisions from the automaker rescue was included in legislation introduced in the House of Representatives last week to expand the government’s $700 billion corporate bailout program.
The UAW has objected to Corker’s proposals for purportedly placing an unfair burden on the union compared with GM and Chrysler’s other creditors.
Corker, who met on Tuesday with GM Chief Operating Officer Fritz Henderson, said GM needed to slash its $62 billion debt load to become viable.
“My hope is that the bondholders and other stakeholders will do the things necessary for GM and Chrysler and possibly Ford to have the right capital structure to compete successfully,” said Corker, who was surrounded by dozens of reporters, photographers and television crews at the show.
GM and Chrysler face an end-March deadline of submitting restructuring plans to the new Congress with expanded Democratic Party majorities in order to demonstrate that they have won needed concessions from the UAW and creditors.
Corker said he was also meeting with Ford and Chrysler executives. He was invited to attend the Detroit auto show by Michigan Attorney General Mike Cox, a fellow Republican.
(Reporting by Poornima Gupta and Kevin Krolicki; editing by Matthew Lewis)