Is Bailout Possible Without UAW Concessions?

"I think it's very important to not just put money in, but let's go and see if they have been fiscally responsible, and if they're really operating the right way. Because right now ... the auto workers ... the benefits and all of those things, are maybe too high. Right now, if you compare it to Germany and to Japan and to other countries, they can build cars cheaper, and they don't have that overhead with the amount of what they pay to the workers, the benefits they provide," he said.

"In America, you sell a car, and $2,000 of each car just goes to benefits," he said.

Union officials say the 2007 contract put workers pay and benefits in line with Japanese and European employees, but American manufacturers have been criticized for not using their workers as productively as foreign firms.

As the economy craters and car sales decline, workers at plants owned by the Big Three are sent home when work slows. Facing similar conditions, American workers at Toyota plants in the U.S., however, use that time to learn new ways to maximize efficiency.

Future of the Auto Industry

Sen. Richard Shelby, R- Ala., on NBC's "Meet the Press" Sunday, said that investing in the auto companies was "money wasted" if they don't fundamentally change the way they do business. "It's throwing money down the drain and it won't work. It's postponing the inevitable," he said.

Also on "Meet the Press," Sen. Carl Levin, D-Mich., countered Shelby's and Schwarzenegger's arguments, saying the government made money when it bailed out Chrysler in the 1970s, that the European Union was offering similar support to European manufacturers.

"Well, this is a national problem. First of all, without any question, we've got at least 3 million jobs dependent upon this industry surviving ... This is a Main Street problem. We've got 10,000 or more dealers; they cover the country and every town of this country. The auto industry touches millions and millions of lives. One out of 10 jobs in this country is auto-related. Twenty percent of our retail sales are auto-related or automobiles," he said.

"We've done this before. 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," he said.

President-elect Barack Obama supports the bailout and has called on the industry to revamp, particularly in his call for 1 million hybrid cars on the road in the next 10 years.

The UAW was pivotal to Obama's Election Day victories, particularly in Michigan and Ohio, and if Congress stalls on the bailout, Obama might have to choose between the most prudent deal for taxpayers and standing by the union.

"Obama has been talking about bailing out Detroit, but he would likely rather have Bush do it, so he won't have to choose between the taxpayers and the union," said Barry Ritholz, CEO of Fusion IQ and author of "Bailout Nation."

Obama and Auto Workers Union

"If the government is going to make this investment, it had better do it wisely," he said. "You can't successfully bail out out the companies without cutting pensions, health care and wages for the union. They should also fire the management. They need to reboot with a different structure including the unions.

"Obama's relationship with the union is complicated and will further complicate things if this drags out to January. That's why he's punting to Bush. He doesn't want this on his plate."

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