November 19, 2008

Honorable Charles Schumer
United States Senator
313 Hart Office Building
Washington, D.C. 20510

RE: Urgently Needed Congressional Action to Stabilize the Domestic Auto Industry

Dear Senator Schumer:

As the Chair of the Erie County Legislature, I respectfully request that the United States Congress act now to prevent the imminent collapse of the Detroit-based auto industry. Western New York has a long and proud history of auto manufacture, dating back to the turn of the last century. Indeed, the Greater Buffalo economy is inextricably tied to its proud status as an auto community, and is host to a GM Powertrain Facility in Tonawanda, NY and Ford Stamping Plant in Woodlawn, NY, as well as a number of auto component supply firms.

On the national level, unless a rescue plan is devised for America's Big Three Automakers - GM, Chrysler and Ford - the Center for Automotive Research projects that three million jobs - far beyond the labor force and management team at each production facility - could be lost. These job losses, which include those employed at dealerships, component manufacturers and auto parts suppliers, do not reflect the tsunami impact on our economy if an additional 3,000,000 Americans are forced to join the ranks of the unemployed.

This human and economic tragedy can be averted if funds that have already been appropriated in the $700 billion financial rescue package would be directed to the domestic auto industry. A $25 billion bridge loan is urgently needed to enable GM, Ford and Chrysler to continue operations, restructure and avoid liquidation.

Yes, liquidation, as a Chapter 11 reorganization is simply not an option for any of our domestic automakers. Debtor-in-possession financing would not be available to the auto companies, and consumers will not make their second largest purchase from a company in bankruptcy. These two factors would sound the death knell for the American auto industry.

The Detroit-based automakers have been well on their way to eliminating the labor cost gap between Detroit and the foreign automakers who have penetrated the U.S. market. These savings accrue from two very aggressive labor-management agreements, one in 2005 and the other in 2007. Indeed, the wages of new workers have been cut by 50%, and fully one-half of the companies' liabilities for retiree health benefits have been erased.

The national economic downturn is no fault of our domestic auto industry or its dedicated workforce that manufacture an exceptional product that has been the source of American pride for decades.

Please do everything in your power to move forward this important economic rescue package before the uncertainty surrounding the future of the American auto industry does further damage to our faltering national, state and regional economies.

Respectfully submitted,

Lynn M. Marinelli
Chair
Erie County Legislature

c: Steve Finch, GM Powertrain Plant Manager
    David Buzo, Ford Stamping Plant Manager
    Sal Moreno, President, Local 774 (GM)
    Charles Gangarosa, President, Local 897 (Ford)
    Dr. Andrew Rudnick, Buffalo Niagara Partnership

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