Geithner: Our Job Is to Save Companies, Not American Jobs
Treasury Secretary Tim Geithner appeared before the Senate Banking Committee today to discuss the Wall Street bailout, but Sen. Sherrod Brown (D-Ohio) wanted to talk about the auto industry instead. There was good reason for Brown’s concern. Not only are Detroit’s automakers hemorrhaging cash, ditching dealerships and laying off employees, but recent reports indicate that the Big Three are devising ways to clip costs further by exporting more labor and importing more vehicles.
In light of that news, Brown wanted to know whether the White House, which has already given billions of dollars to Chrysler and General Motors to keep them alive, was putting pressure on those companies not to close plants in the United States just to open cheaper ones in China and other developing world nations.
There was a firestorm in this country when we give billions to banks and they paid huge bonuses [but] you haven’t seen anything yet for what’s going to happen if we put billions into auto companies and they shut down plants in this country and open plants in China at a dollar an hour — or less.
Are you pushing back on the auto industry on their restructuring? Is the government representing taxpayers and representing workers and communities pushing back on their including anything like this plan to shut down plants the United States and move them abroad and open production and open plants and produce and sell back here?
You already know you’re not going to like Geithner’s answer. “It’s a difficult balance,” he began…
The president’s objective is to try to make sure that we help facilitate a restructuring that will leave this firm in existence, save it from bankruptcy, allow it to operate over time as a viable company without government support.
That’s what we’re trying to do, and we’re doing exceptional things to try to make that possible. But I do not believe that we can do that and also be involved in making detailed decisions about how they run their business and how they do that. And that’s the balance we’re trying to strike.
Though Geithner declined to mention it aloud, it appears that Brown — indeed, the whole of U.S. manufacturing — will be forced to confront the long-emerging reality that, in a globalized economy, viable companies are those that pay as few salaries as they possibly can in the United States. Even if those companies have been rescued by the same middle-class taxpayers soon to lose their jobs as a result of the shift.
In many ways the debate is simply a reiteration of the age-old tension between management and labor — a tension mitigated by the underlying realization that neither could exist without the other. The difference here is that the symbiotic nature of that relationship ends once its cheaper to export the labor component.
Indeed, Brown recognizes the dynamic, pointing out that GM’s argument is that, in order to save American jobs, it must slash American jobs. Of course, now we’re not talking about the same jobs.
Wall Street bailout, indeed.