Auto Standoff Highlights GOP, Union Rift

Senators from states that house foreign automakers were most likely to vote against a bailout.
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CHARLOTTE, N.C. -- The battle over an auto industry bailout has revived the culture wars, with Republicans -- particularly Southern Republicans -- battling the United Auto Workers, and automakers caught in the middle.

Republican bailout opponents want "to pierce the heart of organized labor while representing the foreign brands," said UAW President Ron Gettelfinger, at a press conference Friday. "The right wing of this country has basically painted the word 'union' to be a dirty word."

Gettelfinger singled out Republican senators, particularly senators from states that have provided hundreds of millions of dollars in incentives for domestic operations by foreign automakers.

At the center of the controversy is Richard Shelby, R.-Ala., ranking member of the Senate banking committee. Alabama leads the states in cars produced by foreign manufacturers, with Honda, Hyundai and Mercedes-Benz turning out 738,000 vehicles in 2007.

Alabama, Mississippi, South Carolina, Tennessee and Texas have plants operated by foreign auto companies. Of their 10 senators -- all Republicans -- seven voted against the bailout and three did not vote.

Avondale Partners analyst Kathryn Thompson says the auto industry brought some of its problems with Congress on itself by partnering with the UAW. At some hearings, she noted, Gettelfinger was first to offer his testimony, ahead of the Detroit Three CEOs. "UAW presenting first sends a signal that the union carries greater weight than the automakers," she says.

"I don't think it goes over very well when the lines blur between the UAW and the auto industry," Thompson says. "The auto execs have backed themselves into a corner. It becomes a culture war."

Appearing on MSNBC Friday, Shelby said that neither the UAW nor the managements of Chrysler,

Ford

(F) - Get Report

and

General Motors

(GM) - Get Report

are committed to change. He denied that having plants in Alabama affects his view. "I'd vote against this bailout if there were five GM and Ford plants in my state because it's the right thing to do," he said.

Charles Territo, spokesman for the Alliance of Automobile Manufacturers, said it's unreasonable to assume that plant sites shape the views of members of Congress, or that foreign automakers want U.S. automakers to fail. The group's 11 members include the Detroit Three,

Toyota

(TM) - Get Report

,

BMW

,

Mercedes-Benz

and

Volkswagen

.

"These senators have different philosophical beliefs on how businesses should run and what government's role should be and how companies should be helped out of this crisis," he said.

"The failure of any manufacturer would lead to very difficult circumstances for any other manufacturer who makes vehicles in the U.S.," Territo said. Because auto sales have fallen from about 16.5 million in 2007 to 10.5 million in 2008, most suppliers are deeply troubled. An automaker's failure could cost a big chunk of business at a bad time to seek the financing to continue operating as markets shifted, he said.