Automakers make increasingly urgent bailout plea in Washington
Last Updated: Thursday, December 4, 2008 | 8:23 PM ET
The Associated Press
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Desperate automakers ran into fresh obstacles from skeptical lawmakers in Washington, D.C., on Thursday as they appealed with rising urgency — and a new dose of humility — for a $34 billion US bailout.
Without help, said Senator Chris Dodd, chairman of the banking committee, "we're looking at a death sentence."
With lawmakers in both parties pressing the automakers to consider a pre-negotiated bankruptcy — something they have consistently shunned — the Big Three were contemplating a government-run restructuring that could yield results similar to bankruptcy, including massive downsizing, in return for the bailout billions. But there was no assurance they could get even that.
Congressional officials also said during the day that one leading proposal — to tap an already-approved fund for making cars environmentally efficient — wouldn't give the carmakers nearly as much money as they say they need.
The auto executives pleaded with lawmakers at a contentious Capitol Hill hearing — their second in as many weeks — for emergency aid before year's end. But with time running out on the current Congress, skepticism about the bailout appeared strong.
"No thinking person thinks that all three companies can survive," said Republican Senator Bob Corker of Tennessee.
The auto executives are to make their case at a House hearing on Friday, and Congress could take up rescue legislation next week in an emergency session.
Skepticism that a bailout would come wasn't limited to Capitol Hill.
President George W. Bush told NBC News, "No matter how important the autos are to our economy, we don't want to put good money after bad. In other words, we want to make sure that the plan they develop is one that ensures their long-term viability for the sake of the taxpayer."
Executives from General Motors Corp., Ford Motor Co. and Chrysler LLC all agreed during Thursday's session that a multibillion-dollar bailout deal would include a supervisory government board that could order major overhauls of the companies if deemed necessary for survival.
People won't buy cars from bankrupt companies: union
United Auto Workers union President Ron Gettelfinger told senators that any kind of bankruptcy was not "a viable option." Gettelfinger said consumers would not buy autos from bankrupt companies, no matter the terms of the arrangement.
"I believe we could lose General Motors by the end of this month," he also said, pressing the urgency of the situation.
The Big Three CEOs admitted past errors.
Ford CEO Alan Mulally said his company's approach once was "If you build it, they will come."
"We produced more vehicles than our customers wanted, then slashed prices," he said. But as a result of these past mistakes, "we are really focused," he said.
Congressional Democrats have urged the administration to tap into an already enacted $700 billion financial bailout program to help the auto industry. The Bush administration has said that it won't, and would prefer aid be taken from an earlier $25 billion program to help the industry retool its plants to make their vehicles more fuel-efficient.
Congressional budget analysts have told top Democrats that would yield only $10 billion to $15 billion in short-term loans. Congressional officials gave the information on condition of anonymity.
Protesters briefly interrupted the hearing.
"The bailout is a sellout!" demonstrators chanted as they were escorted from the room by police.
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