Corker Rides Auto Issue to Emerge as New Republican Senate Star

Dec. 13 (Bloomberg) — Tennessee Senator Bob Corker said yesterday that a crisis like the U.S. automakers’ fight for survival can create opportunities by forcing people to look at things in new ways.

The first-term Republican might just as well have been talking about his own career.

Corker, a former mayor of Chattanooga who became a senator just two years ago and ranks last in seniority among the 10 Banking Committee Republicans, emerged from relative obscurity to become a key figure in the 11th-hour negotiations over a proposed $14 billion auto-industry loan package.

While the effort ultimately collapsed in partisan discord over union wages, Corker, 56, stands as a rare winner in the debate.

“I’m hard-pressed to think of another member who’s been here such a short period of time who’s made such an impression on colleagues of both sides of the aisle,” says Senate Republican Leader Mitch McConnell of Kentucky.

Majority Leader Harry Reid seconded McConnell’s assessment. “I’ve been extremely impressed with Bob Corker,” says Reid, a Nevada Democrat. Illinois Senator Dick Durbin, the No. 2 Democrat, says Corker did a “magnificent job.”

Corker tried to broker a deal after Senate Republicans turned their backs on appeals from Vice President Dick Cheney and White House Chief of Staff Josh Bolten to support the bailout package. The House had approved a plan, backed by President George W. Bush, for short-term loans to keep General Motors Corp. and Chrysler LLC from running out of cash early next year.

Plan B

Corker’s proposal became Plan B. His package sought to overcome Republican doubts, without alienating Democrats, by making creditors exchange some bonds for stock, and by cutting union wages to levels competitive with amounts paid at U.S. factories owned by European and Asian automakers.

“Crisis is when good things happen — when you make people do things” they wouldn’t ordinarily do, Corker says.

When executives from Detroit’s Big Three automakers appeared before the banking committee last month, Corker originally suggested bankruptcy as a way to restructure the industry. He started moving toward efforts to broker a compromise after a Dec. 3 briefing on GM’s restructuring plan and a meeting with GM Chief Operating Officer Fritz Henderson.

The following day, he proposed a plan that became the blueprint for possible compromise, saying he was willing to give the automakers a chance to solve the crisis without bankruptcy if the government got a “big stick” to force reforms.

Closed-Door Talks

As the Senate considered the House-approved bailout on Dec. 11, the freshman Republican holed up for seven hours behind closed doors on the first floor of the Capitol with the Democrats’ top negotiator, Banking Committee Chairman Christopher Dodd, as dozens of reporters crowded the ornate hallway outside, waiting for news.

The talks included Stephen Feinberg, founder of Cerberus Capital Management LP, which owns Chrysler; Ford Motor Co. lobbyist Ziad Ojakli; GM lobbyist Ken Cole, and United Auto Workers union lobbyist Alan Reuther. Treasury Secretary Henry Paulson and GM’s Henderson kept tabs by telephone, Corker later said.

The sticking point, which ultimately killed prospects for an agreement, was a Republican demand to set a specific date for cutbacks in auto-worker wages and benefits. Corker says lawmakers were “three words” away from a deal. “Had we agreed on a date, any date that’s reasonable, I think it would have passed the Senate with 90 votes,” he says.

Falling Short

Instead, on a 52-35 tally, supporters of the package fell short of the 60 votes they needed to end Senate debate and proceed to a vote to approve the measure.

Dodd says wage-reduction demands had more to do with jabbing the Democrats’ loyal union constituency than with reforming the automobile industry.

The banking committee chairman, in response to a question, later acknowledged that Corker’s lack of seniority may have hindered his ability to sway more Republican colleagues. Still, “you’ll hear no criticism from me about how Bob Corker handled himself,” Dodd says. “I respect him immensely for stepping up and making the effort.”

Corker will have to make an even greater effort to build clout when the Senate reconvenes next month. There he’ll find himself in a minority wielding less influence, with Republicans holding 41 or 42 of the body’s 100 seats compared to 49 now.

Frist’s Successor

Before this week, Corker was perhaps best-known for prevailing in a hard-fought 2006 race against then-U.S. Representative Harold Ford for the Tennessee seat vacated by former Senate Republican Leader Bill Frist.

Corker founded Bencor Corp., which got its start by installing drive-through windows at fast-food restaurants and grew into a shopping-center construction company with operations in 18 states. After selling his construction business, Corker ran commercial real estate companies. He was elected in March 2001 to a four-year term as mayor of Chattanooga, Tennessee’s fourth-largest city.

After the bailout failed in Congress, the Bush administration said yesterday that it may provide short-term auto-industry aid from the $700 billion financial rescue package approved earlier this year. Corker says an aid plan should include conditions similar to those he proposed, which Paulson could impose “by fiat.”

Reid says Corker’s efforts will “pay dividends next year” when a new Congress is likely to renew consideration of ways to bolster the automobile industry.

“We weren’t able, based on his good work, to arrive at something on which we could get enough Republicans to agree,” Reid said on the Senate floor after negotiations collapsed. “But he did some wonderful work, and I think the work he did is going to pay dividends next year.”

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