Las Vegas Sun

By Lisa Mascaro

Sun, Dec 14, 2008 (2 a.m.)

When the vote tally emerged in the auto bailout, Nevada’s lawmakers in the House fell into what has become a predictable new pattern: Republican Rep. Jon Porter and Democratic Rep. Shelley Berkley voted yes. Republican Rep. Dean Heller voted no.

The vote was in all likelihood the last one Porter will cast after six years in Congress — and it was consistent with his positions over the past year, including his support of the government’s $700 billion Wall Street rescue. After voting mostly with the conservative majority for two terms, Porter’s final years showed an understanding that his suburban Las Vegas district had turned Democratic and attitudes in the country as a whole had shifted.

No such revelations were on display on the Senate side of the Capitol.

Sen. John Ensign helped lead Republicans as they killed the $14 billion bailout of GM, Ford and Chrysler. The Republicans knew that, in the end, the White House would probably come up with the money for Detroit, as the Bush administration has hinted it will do.

So the Republicans rose up and killed the congressional action, standing up to the Democratic initiative and to a White House with which they did not agree.

In doing so, they have done much more than dismiss Detroit’s pleas. They almost certainly have given a preview of how they will operate in the new era of consolidated Democratic government once Barack Obama becomes president. If Porter remained in Congress and continued reaching across the aisle to Democrats, he would likely find himself an outsider in his own party.

Nevada unemployment is headed toward double-digit terrain as the boom cycle that fed the economy for 20 years recedes. Nationally, the recession is projected to be long and deep. Some have begun calling it the Great Recession.

Yet with the threat of as many as 3 million auto-industry-related jobs lost if the Big Three go under, Ensign and the others capitalized on popular discontent with the bailout and tried to blame it on an old foe — organized labor.

Republicans pointed fingers at the powerful United Auto Workers Union’s $29 hourly jobs for Detroit’s collapse. They labeled the bill the “Democrat-White House” bailout — even after many of them, including Ensign, voted for the bailout of Wall Street.

With Ensign now in a stronger leadership role, Republicans constructed an opposition campaign that played to their conservative base, seeking to reclaim an image of fiscal discipline after they themselves engaged in years of enormous deficit spending.

The main alternative Ensign and the others were offering Detroit was forced bankruptcy — which company officials opposed and which would serve to gut the union. They argued that an industry on the brink because of what is now regarded as years of bad management decisions was failing because of labor.

The Republicans also drew upon a familiar tool: an alternative reality, based on information spread by the right-leaning think tanks.

Ensign joined Southern state conservatives in claiming that Detroit’s labor costs are $70 an hour compared with $30 for the Japanese and other foreign-owned plants operating primarily in the Southern states.

Those numbers, however, have been found grossly wanting. The average base pay in Detroit was $29 an hour on average for Ford compared with $26 at the foreign-run plants, the automakers themselves explained. Benefits, too, are about the same ($12 and $11 per hour, respectively).

The differences between the Detroit labor model and the one prevailing in the foreign-car plants lie in two areas:

First, the union has negotiated work rules that can add another $14 an hour, on average, with extras such as overtime and shift differentials, compared with $9 for such extras at the foreign-owned plants. That brings labor costs to $55 an hour versus $46 an hour.

But the most striking difference is in the costs Detroit incurs for its retirees, the union workers who years ago helped build the middle class that is now shrinking with declining real wages. Because there are so many of those retirees — because the industry was thriving — they add another $15 to the hourly labor cost in Detroit, compared to just $3 at the newer foreign-owned shops that have not yet built up a large pool of retirees.

If you factor in retirees long since gone from the assembly lines, Detroit’s hourly cost rises to $71 compared with $49 for the foreign competitors. That gap will close, of course, as workers at the foreign-car plants retire.

There is more.

Ensign insists that including all labor costs is an important measure of the overall company’s competitiveness.

But others observe that labor makes up just 10 percent of auto company outlays — and the union contract signed in 2007 is bringing costs down further. In other words, the gap in labor costs, regardless how it is calculated, is only one part of the puzzle.

Those observers say the best way for the Big Three to compete is to make cars Americans want to buy. Maybe it’s not the workers who are killing Detroit but managers who chose to build Hummers over Honda Civics or Toyota hybrids, creating a new market of minivans and SUVs that were highly profitable for a decade — until gas hit $4 a gallon last summer.

“It’s not that the companies weren’t innovators,” said Gary Burtless, a former Clinton administration economist now a senior scholar at the Brookings Institution. “It’s just that the U.S. is more interested in gas sipping than gas guzzling.”

Last week, when the United Auto Workers refused to agree to swift wage cuts, Republican senators walked the halls saying the UAW killed the deal.

Democrats, such as Sen. Sherrod Brown of Ohio, had another way of looking at it — Republicans were trying to gut the middle class in a “last gasp” of power.

The next day, Ensign said the White House’s indication that it would come up with the bailout money was outrageous. “It isn’t too late for the Bush administration to stand up and show some courage,” Ensign said on CNBC.

Republican strategist Kevin Madden, a former top aide to presidential candidate Mitt Romney, said the bailout shows how the party is now “looking to identify with voters as the defender of the taxpayers.”

Others see in that position a party that has reverted to old arguments, failing to read the political shift the country demonstrated in the past two federal elections.

“What it says about the Republicans is few of them have really learned the lessons of the election or Bush’s fall from grace in the past four years,” said Brad Woodhouse, executive director of the liberal group Americans United for Change.

“Hard, unyielding, unpragmatic ideology is not what America’s looking for,” Woodhouse said. “If they want to give Democrats that kind of contrast, they’re going to continue to lose elections.”

Jon Porter would probably agree. Unlike Heller, who represents the largely rural and conservative north, or Ensign, who is often Nevada’s most popular elected official and does not stand for reelection until 2012, Porter operated in a district that looks a lot more like the country as a whole — tilted toward a Democratic-led center.

Porter recognized the shift. He chose to reach across the political aisle. The events of the past week suggest that a sizable group of Republicans in Washington intend no such thing.

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