Congressman McCaul Votes Against Auto Bailout

AUSTIN – Congressman Michael McCaul (R-TX 10) stood up against pouring more taxpayer dollars into failing private companies by voting against the proposed bailout of the Big Three U.S. Automakers. Despite his stand, the bill passed the U.S. House but still needs Senate approval.

"Bailing out these auto companies would be throwing good money after bad into failed business models. The companies still haven’t come up with a viable restructuring plan," said Congressman McCaul. "The responsible path is for these companies to file for bankruptcy to begin restructuring. This is the remedy our government provides, not handouts."

Instead of a bailout, Congressman McCaul supports a government-backed restructuring plan in which the Federal Government would back the warranties on cars the companies sell. "I don’t think the taxpayers mind extending a helping hand to the American auto industry. But the government doesn’t need to entirely prop up these companies," Rep. McCaul said.

Congressman McCaul believes that auto companies can be successful in the United States. He points to Toyota, which has a truck manufacturing plant in San Antonio, and is more competitive than the Big Three in the same market. The San Antonio plant was Toyota’s sixth such facility in the U.S. Toyota has a successful business model that includes competitive, yet reasonable wages, in a right to work state. "Toyota is an example of how you do this right," Rep. McCaul said.

Ford, Chrysler and General Motors originally came to Capitol Hill aboard private luxury jets asking for financial help. Only after taking on public criticism did they show any interest in tightening their own belts. While the Democrats’ proposal to give the automakers $14 billion was less than the original request of $25 billion, the companies openly warn that this is only the first installment and that more money will be necessary to keep them afloat. "Where does it end?" asked Rep. McCaul.