CQ Transcriptswire

SPEAKERS: TOM BROKAW, HOST

SEN. RICHARD C. SHELBY, R-ALA.

SEN. CARL LEVIN, D-MICH.

T. BOONE PICKENS

[*] BROKAW: First, the $25 billion auto bailout is facing very tough opposition from Republicans on the Hill and some Democrats, as well. With us this morning, two key parties in those discussions, Carl Levin , senator from Michigan; and Senator Richard Shelby in Alabama this morning, two men on opposite sides of the argument.

Gentlemen, if I can, I’d like to provide some political context this morning with some recent statements.

Here’s John Boehner, who is the Republican leader of the House of Representatives: “Spending billions of dollars of additional federal tax dollars with no promises to reform the root causes of crippling automakers’ competitiveness around the world is neither fair to taxpayers nor sound fiscal policy.”

He’s from Ohio, which has a big automotive investment.

“It’s time for new management and stringent conditions. It’s Uncle Sam. It’s not Uncle Sucker.”

That’s from Democrat Jim Cooper , a representative from Tennessee. Remember, the Blue Dogs, a group of fiscally conservative congressional Democrats.

Chris Dodd, who is the Senate chairman of the Senate Banking Committee, says, “I don’t know of a single Republican who’s willing to support” this bill.

And Jim Manley, speaking for Senate Majority Leader Harry Reid , said, “We cannot do it without the support of Senate Republicans, who I hope will join us to pass a bill that saves the jobs and protects the livelihoods of millions of hard-working Americans.”

Senator Shelby, no one has been more outspoken than you in opposition to all of this. Are there any conditions that would permit you to vote for a loan or a bailout of some kind for the Detroit Big Three?

SHELBY: I haven’t seen them yet, Tom. I would -- first of all, I think that we would have to see conditions that would fundamentally change the way Detroit does business. They’re not building the right products. They did at one time. They’ve got good workers.

But I don’t believe they’ve got good management. They don’t innovate. They’re a dinosaur, in a sense, and I hate to see this because I would like to see them become lean and hungry and innovative. And if they did and put out the right product, they could survive.

But I don’t believe the $25 billion they’re talking about will, will make them survive. It’s just postponing the inevitable.

BROKAW: You have said that this is not a national problem, which stunned a lot of people. Let us just take you through some of the jobs that are involved here. Let’s begin in the industrial Midwest, if we can. Most researchers say there are three million jobs nationwide. As you can see there in Michigan, Illinois, Missouri, Indiana and Ohio there are thousands of jobs that are involved.

And then, if you talk just about dealerships across the country, nationwide, there are about 740,000 jobs involved with the Big Three in dealerships alone; General Motors, 325,000 jobs in their GM dealers across America.

So, in fact, it is a national problem, isn’t it?

SHELBY: Well, I don’t say it’s a national problem. It could be a national problem. It’s a national concern now. But it could be a national problem, a big one if we keep putting money -- if we put $25 billion in, that’s just the beginning.

Look at AIG. Look at the others. Then you’re going -- they’re going to want $50 billion more, and it’s going to come because the political game is there.

I think it’s a mistake. If -- they would be in a lot of people’s judgment a lot better off to, to go through Chapter 11 where they could reorganize, get rid of the management, get rid of the boards, the people who’ve brought them to where they are today. This is a dead-end, it’s a road to nowhere, and it’s a big burden on the American taxpayer.

BROKAW: All right, let’s go to Carl Levin , the senator from Michigan who’s in Detroit this morning. There are two schools, I think that you can say, broadly speaking, Senator Levin. One is do the bailout with some conditions attached, or allow them to go into bankruptcy. Here’s what’s gotten the attention of a lot of people.

Rick Wagoner, who is the CEO of General Motors, said he is not prepared to resign in return for government aid. “I don’t think it’d be a very smart move,” he said. “I think our job is to make sure we have the best management team to run GM. It’s not clear to me what purpose would be served.”

How can you possibly argue for federal aid to a company that has been led into this difficulty by a man who said he won’t resign?

LEVIN: Well, this is a national problem, first of all, without any question. We’ve got at least three million jobs dependent upon this industry surviving.

We’ve got -- this is a Main Street problem. We’ve got 10,000 or more dealers. They -- they cover the country in every town of this country. The auto industry touches millions and millions of lives. One out of 10 jobs in this country are auto related. Twenty percent of our retail sales are auto related or automobiles. So this is a national problem.

Secondly, there is, unlike some of the statements that you read, there is bipartisan support for support for this industry to get them through a very difficult problem, including Senator Voinovich of Ohio who is co-chairman of the task force that you made reference to.

Other countries are supporting their industries through this difficult period. The European automakers are requesting $56 billion in temporary support, and we expect that they’ll be getting it from the European community.

This is not a Big Three problem alone. This current crisis is a crisis in the economy where there is no credit available to purchase and where people are not buying cars because they are afraid. They are delaying the major purchases that they need to make because of the uncertainly in the economy. So this is a...

BROKAW: But, Senator, the question...

LEVIN: ... different issue, this is a different issue from the need to restructure the auto industry. Finally, on the GM issue, nine of the new models are hybrids for General Motors. General Motors has twice as many cars, twice as many models that get 30 miles per gallon as any other automaker.

So they have begun the changeover, they’ve begun the restructuring. And if it was the difference between getting this kind of support or not, obviously the management should consider resigning. If the government wants to intrude that much into the operations of a company where it can decide who is the right management and who isn’t, then I believe they should consider resigning.

BROKAW: But if you said that...

LEVIN: That should not be...

BROKAW: ... but if you said that...

LEVIN: ... the impediment.

BROKAW: But, Senator, have you said that directly to Mr. Wagoner? You say the government...

LEVIN: I’d be happy to say that to...

BROKAW: ... should decide. The government’s going to provide $25 billion of taxpayer money...

LEVIN: Fine.

BROKAW: Shouldn’t they have a say in who is going to be the management, going forward?

LEVIN: They should have more than a say. There’s an oversight board in the provision for $700 billion, by the way, that’s been provided to the financial industry, and what this would represent is 4 percent of that $700 billion. Four percent to save an industry which is the most important single industry in America.

I’d be happy to tell Rick Wagoner that he ought to consider resigning if that is the difference... BROKAW: Well...

LEVIN: ... between getting this kind of support or not. I haven’t been asked to do that. You’re asking me, now, would I? I’d be happy to do that.

BROKAW: And what have you heard from President-elect Obama about what should be done?

I suspect that you’ve been in conversation with him. And can something be done before the end of the year or are you going to have to wait until the new administration takes office?

LEVIN: Yes, what was missing in your list of quotes, by the way, was not, was not only Obama, but was Bush. Both the president and the president-elect support this kind of immediate aid.

The only difference between them is the source of it, whether or not it’s one pot of $25 billion, which is intended for the future high-tech vehicles, or whether it’s part of the $700 billion stabilization fund, both already appropriated, which Democrats in the Congress favor.

But that is the big issue which divides the White House from the leadership of the Congress.

And by the way, the Republican leader in the Senate favors immediate support for this industry. All of us want conditions. All of us are -- want to support the taxpayers. All of us want to continue the restructuring.

But in order to do that, you’ve got to have this interim support, as every other country with an automobile industry is going to do. No other country with an automobile industry will allow it to go down.

BROKAW: Senator Shelby, did you hear anything in what Senator Levin had to say that would keep you from mounting a filibuster on the floor of the Senate to oppose this?

SHELBY: Absolutely. I have a lot of respect, and we’re -- Carl Levin and I are friends. We work together on a lot of issues.

SHELBY: We totally differ on this. I know he comes and he represents a lot of people that will be deeply affected by Detroit. We all care about our jobs. We care about tomorrow’s products.

But if we let the money go to General Motors, for example, with the same management, the same ideas, it’s money wasted. Mark it down and watch it, and it will be more money. This is just the beginning of corporate welfare in a big, big way.

BROKAW: Can I read...

LEVIN: It’s not the beginning.

BROKAW: Can I read something?

LEVIN: It’s not the beginning.

SHELBY: Well, we’ve already got it, I said, in a big way.

LEVIN: It’s not the beginning, Tom. We’ve done this before. We -- we’ve -- we supported Chrysler when it was in this kind of difficulty. People said, “Oh my God, that’s corporate welfare.”

We made money, actually, by supporting Chrysler. We did it with the airline industries in 2001. The airline industry was in real trouble. The government came to its support.

We’ve done this in a number of industries. This is not unprecedented. The issue’s whether we’re going to have manufacturing in America or whether we’re going to see the continuation of the loss of millions of jobs overseas.

BROKAW: Senator -- Senator Shelby...

SHELBY: We don’t need government -- governmental subsidies for manufacturing in this country. It’s the French model. It’s the wrong road. We will pay for it. The average American taxpayer is going to pay dearly for this, if I’m not wrong.

BROKAW: All right. Let me just ask you...

LEVIN: Two-hundred billion in tax -- $200 billion in lost taxes is the estimate if the domestic automobile industry goes under; $200 billion lost to the taxpayers of America through the loss of these three million jobs, the pickup of all the pensions, which would be necessary. BROKAW: Let me just ask you both about bankruptcy.

Here’s from The New York Times, Michelle Maynard writing on Thursday. “A bankruptcy filing by a single Detroit car company could cost the economy $175 billion in the first year of the legal case in lost employee income and tax revenue, the Center for Automotive Research estimated this week. Given the complexity, a GM bankruptcy case could last three years or more.”

And, Senator Shelby, 80 percent of car buyers who were questioned said they would not buy a car from a company in bankruptcy because it’s a long-term investment. It’s not like an airline. It’s something that they would have to depend on to get parts and service.

So is bankruptcy really a viable option if you want to, in the long term, save the Big Three in Detroit?

SHELBY: It is -- it is a viable option, but the Big Three -- they’re going to have to save themselves. If they don’t -- if they keep going down the road -- and I predict they will -- they’re on now with just a blood transfusion, a lot of money, it won’t matter.

They’re postponing, as I said earlier, the inevitable if they don’t change the way they’re doing business, if they’re not innovative, if they’re not willing to face up to their workers and say, “Look, we’ve got to renegotiate some things here. We’re not making money.”

The government cannot subsidize and should not subsidize jobs like this, and that’s what the road we’re going down is going to do.

BROKAW: Senator Levin, let me just read to you something that Tom Friedman wrote in The New York Times last week.

“The blame for this travesty not only belongs to the auto executives, but must be shared with the entire Michigan delegation in the House and Senate, virtually all of them, year after year, voted however Detroit automakers and unions instructed them to vote. That shielded GM, Ford and Chrysler from environmental concerns, mileage concerns and the full impact of global competition that could have forced Detroit to adapt a long time ago.”

At a time when Toyota was producing the Prius and Honda, much more gas-friendly cars, GM, in fact, was turning out the Cadillac Escalade, the Hummers and other big SUVs that were eating a lot of gasoline when a lot of people were raising flags.

LEVIN: We just voted to increase the mileage requirements earlier this year. We all voted for that, we came to an agreement on it. We can all look back at history and look for plenty of fault in plenty of places, by the way, including the Big Three.

But this has changed, and what Tom Friedman and others have not recognized is the significant changes that have taken place. Half of the -- of the hourly workers at GM have been let go in order to restructure GM. Over a third of the white collar workers, the salary workers, have been let go in order to help restructure. The -- the unions have taken major hits on benefits.

And we’ve also seen GM, Ford and Chrysler shift their product mix. It was under a lot of pressure from the Tom Friedmans and others. Fine. But it has had an effect. And what troubles me is that people do not see that that restructuring and that move into the high-tech and advanced technology vehicles has begun significantly.

As I said before, GM now produces more models getting more than 30 miles per gallon, twice as many, as any of its competitors. Ford, Chrysler are moving into the hybrids. We’re doing the plug-ins.

GM is going to lead the way in plug-in hybrids, if people will recognize that this isn’t the ‘70s, when the -- when the Big Three were producing inferior products.

Things have changed, if people will only recognize what the Big Three -- what the UAW have worked out in terms of concessions, in terms of pay cuts; in terms of benefit cuts. Recognize that change, but let it happen.

We can’t get there unless we have this temporary infusion to get it over a problem which is not the creation of the Big Three. This economic collapse is not the -- was not the caused by the Big Three. They had problems that they did cause 10 years and 20 years ago.

They’ve changed. But the economic circumstances that we find ourselves in is an international, global economic problem that, again, no other country with an auto industry will allow their industry to drop out and die.

BROKAW: Senator Shelby, you get the last word here.

LEVIN: Yes, he should.

BROKAW: You’re in Tuscaloosa, Alabama. Are you...

SHELBY: Thank you.

BROKAW: ... prepared to leave the studios here today and go to the Tuscaloosa Chevrolet dealership just off I-59?

SHELBY: Absolutely I would.

BROKAW: And...

SHELBY: And I would hope that...

BROKAW: And -- and...

SHELBY: ... they continue to produce good cars. I’ve bought them before and will buy them again. But this -- these companies are going to have to downsize, they’re going to have to be innovative, they’re going to have to change their whole model. And the government, at the end of the day, Tom, should not choose which companies are going to survive or not survive. We should let the market work that way. And it has...

LEVIN: Nor should we choose its leaders.

SHELBY: ... in the past, and it will in the future.

BROKAW: Do you think -- gentlemen, let’s see if we can get any agreement on this. Do you think this will be resolved in the lame- duck session, Senator Levin, first of all?

LEVIN: I do. I think that the leaders in both houses want this interim support, Democrats and Republicans. There’s a difference on which is the best way to do it, but they agree, as does President Bush and President-elect Obama, that there must be this support so that we have an industry which can continue to do the innovation which has already begun.

BROKAW: And, Senator Shelby, you think it can get done before the end of this lame-duck session?

SHELBY: I hope it won’t get done because I think it’s a waste of taxpayers’ money. It’s throwing money down the drain, and it won’t work in the long run. It’s postponing the inevitable. Remember that.

BROKAW: All right. Thank you very much, Senator Shelby...

SHELBY: Thank you.

BROKAW: ... in Tuscaloosa, Alabama.

LEVIN: Thank you, Tom.

BROKAW: Carl Levin in Michigan, thanks for being with us.

It is “Green Is Universal” all week here at NBC, and the issue of energy dependence is certainly key in that discussion. And joining us now, a very familiar figure, the legendary Texas oil man, T. Boone Pickens.

Welcome, Mr. Pickens, from Dallas this morning.

PICKENS: Good morning, Tom.

BROKAW: You just heard that very spirited discussion. Do you think the Big Three automobile dealers should survive?

PICKENS: You know, I -- it’s not my subject. But I wonder, you know, what you’re going to do about the next industry. Is it going to be the airlines?

Or what if Toyota and Honda want some help, too?

I -- I don’t know. I don’t know where it stops. BROKAW: Well, let me talk about what you have been talking about on television and everywhere else these days, which is converting to wind-driven general -- generation of electricity and transferring natural gas to big public transportation.

I am told that, given the perilous state of the economy, the decline in oil prices, which has not made it as urgent in the minds of a lot of consumers, that you find yourself now at a very difficult crossroads financially in your own situation, and you’ve had to call a halt to your development plans.

PICKENS: Well, the wind, you know, it -- I’ve got a -- I had planned on 30 percent equity, 70 percent debt, and I can’t get any, any, any money for that at this point. But it doesn’t mean that’s the end of it. It’s been postponed is all it is.

And so -- but we’ll get up and going. I don’t receive my first turbines until 2010, so I’ll get it done and we’ll be going by 2010. So it’s -- we have to get -- in America, we have to get on our own resources. And wind and solar are going to have to be used -- they -- for all kinds of reasons.

But one, we’re going to have to add 20 percent more to our power generation infrastructure in the next 10 years. So that’s 200,000 megawatts. That could really help us. The first year, when you start that program, and it should be started within the next year or two, that when you start that program the first year will be 138,000 jobs.

And, by the time you finish it, it’ll be 3.5 million jobs. So the wind infrastructure is -- it’s going to have to be done. When you do that, you’re going to release a lot of natural gas, and natural gas is abundant.

We have abundant natural gas in American. It’s the cheapest natural gas in the world.

PICKENS: So here we have an abundant, clean by eight -- cleaner by 80 percent than diesel, cheaper; and it’s ours. We need to put our heavy duty 18-wheelers on the natural gas.

BROKAW: When you went to President-elect Obama and talked to him about your plan, was he enthusiastic and did he agree to support it as a high priority in his new administration?

PICKENS: Well, when you say enthusiastic, I wouldn’t say he was jumping up and down. But he asked a lot of questions and took notes. But now, two times I’ve heard him say that, in 10 years, that we will not be importing oil from the Mideast.

If that’s -- and I believe him when he says that, which tells me he has a plan. And that plan would have to use natural gas, because natural gas is the -- it’s the one and only fuel that moves an 18- wheeler other than diesel and gasoline.

You can’t do it with a hybrid, you can’t do it with a battery, you can’t do it with a fuel cell. The only fuel -- so when you -- it’s not like we’re choosing a fuel, it’s the only fuel that we have in America that will replace foreign oil.

BROKAW: Senator Obama is very much in favor of having a million electric cars in a very short period of time. Do you think that that is practicable, and is it part of your larger scheme?

PICKENS: Well, I like the idea. There’s no -- the plug-in hybrid’s good. But think, Tom, one million of those looks big on a parking lot. But you got to think -- you got to look at the whole picture. There are 250 million vehicles in America, and the hybrid, all it does is move the light duty, you know, cars and trucks -- or pickups. But the trucks, the big stuff, has got to be moved by natural gas.

But when you look at 250 million vehicles and you’re importing 70 percent of your oil from foreign countries, and of the 70 percent, 50 percent comes from the Mideast. So if -- if Senator Obama is going to accomplish what he wants to do -- it’s all here. We can do it.

In America, it’s interesting, because this has nothing to do with politics. This has something to do with all of us in this country. And we can all pull together, do the right things, and we will solve the energy problem.

BROKAW: Former Vice President Al Gore has another plan for the generation of electricity in this country. He wants to take it entirely off the carbon footprint, remove it from oil and coal, those kinds of fuels and go to alternative forms of energy, and he wants to keep nuclear in place where it is.

Can both of your schemes fit in the best interest of the country?

PICKENS: There are some things that -- that Al and I have in common. We have -- we’ve talked about this subject. I think that Al can go along with the bridge of natural gas to the battery transportation fuel generation, which is 20 to 30 years away for -- to get it to the level that I think it will have to be to, to take out foreign oil.

So here you’re -- you’ve got the bridge, and you go ahead and use it, the natural gas, and get to the battery as quick as you can.

BROKAW: And, Mr. Pickens, let me ask you about this as well. The price of oil has dropped, as you know better than anyone, down to around $50 or $60 a barrel. That has driven down gasoline prices. People don’t feel the same urgency that they did last summer when they were paying more than $4 a gallon for gasoline.

Does that relieve the political pressure on members of Congress and even on your efforts to get something else done that is an alternative to the traditional way of fueling transportation in this country?

PICKENS: Well, first, we’re importing almost 70 percent. I think that is a huge security problem for the country. I want that fixed. So we’ve got to reduce the dependency on foreign oil. The cost of it, we got lucky. But we got lucky, but there may be another part to it, too. When I launched my campaign on July the 8th, gasoline was $4.11. Today it’s half that price.

I don’t know. If you look back over the history of oil prices, gasoline prices, we’ve yo-yoed at times. In the ‘70s we -- the price went up, and then we had plenty of oil all at once from the Mideast. When we did, the price when down. We put away any ideas of renewables at that point. And then in the ‘80s, the ‘90s and here we are again. The price has gone down, so, oh, boy, we’re fixed. Well, we’re not fixed because we’re still importing almost 70 percent.

But this is great to have cheaper gasoline prices, no question about that. If there’s anything that helps our economy, it’s lower energy costs. So -- but it doesn’t mean that we’ve solved any problem because, over the history of 40 years of no energy plan in America, we now have to have an energy plan. And I think we’ve got it.

There are only two ways you can go, Tom, on this. One, you have an energy plan to solve the problem, and if you don’t have an energy plan that means you’re for foreign oil.

So it’s going to come down to a very clear up or down, and it’s going to be the American people who are going to -- are going to demand an energy plan for the future generations of our country. BROKAW: For most of your career, Mr. Pickens, you were a traditional Texas oilman, one of the most successful in the game, and of course it was in your interest for the Big Three in Detroit to continue to turn out those big automobiles that had a big appetite for oil-based products.

As you look back on your career now, do you have any regrets about what you did earlier?

And did you ever think, at that time when you were in the midst of your oil career, “What are we doing to this country?”

PICKENS: I don’t think so. You know, I was a good geologist and I found a lot of oil, and that was the business I was in. And, you know, you were burning it in your car and so -- I was too and the rest of the people in America.

So what this comes down to it’s -- you know, if you want to blame somebody for it, you can say you didn’t have the leadership in Washington and start there.

But all of us in America used the oil. And the reason we did, the gasoline was cheap. It was cheap, and that’s why we did it.

And now when we saw gasoline -- when we saw oil go to $100 a barrel all of us realized that we’re in a different, we’re in a different world now. And if you think oil’s going to stay down at $50 and $60, I -- I’ll make you a $10 bet on that, that we’ll be back to $100 a year from now.

So -- and we’re going to -- it’s going to move on up. If we don’t do anything -- go with me, fast-forward back, or fast backward, that 40 years...

BROKAW: Rewind.

PICKENS: ... 40 years, no plan. Now, if we go fast-forward 10 years with the same approach to energy in America, where will we be? In 2018 we’ll be importing 75 percent of our oil and the price will be $200 to $300 a barrel. That is not going to work.

BROKAW: T. Boone Pickens, thank you very much for being with us. I know that we’ll be hearing from you in the days and years to come.

END

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Nov 16, 2008 15:19 ET .EOF

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