Automakers plead for aid, but Senate votes lacking
By KEN THOMAS
Associated Press
December 4, 2008
Page 2 of 2
"I think it's too bad that negotiated contracts between labor and management are going to have to be changed," Reid said. "But it's obvious to everyone -- as strong of a union guy as I am -- it's obvious that there has to be some changes made."
Ahead of Thursday's televised hearings, GM's president and chief operating officer, Fritz Henderson, met with congressional aides and said bankruptcy for his company would further erode consumer confidence. About 25 auto dealers also combed through House and Senate office buildings, lobbying for the bailout package.
General Motors Corp., Chrysler LLC and Ford Motor Co. submitted three separate survival plans to Congress this week after flunking their first attempt to persuade lawmakers to throw them a lifeline.
GM and Chrysler said they needed an immediate infusion of government cash to last until New Year's, and both said they could drag the entire industry down if they fail. Ford wants a $9 billion standby line of credit in case a competitor fails.
Chrysler said it needed $7 billion by year's end to keep operating. GM asked for an immediate $4 billion as the first installment of a $12 billion loan, plus a $6 billion line of credit to use if conditions worsen.
Ford's chief executive, Alan Mulally, and GM's chief executive, Rick Wagoner, said they would work for $1 a year if each company accepted government loans. The carmakers also have offered to cancel bonuses and merit raises. Chrysler said its chief executive has cut his annual pay to $1.
All three plans envision the government getting a stake in the companies that would allow taxpayers to share in future gains if they recover.
The Senate Banking, Housing and Urban Affairs Committee was to hear testimony Thursday from the executives, the UAW's president, Ron Gettelfinger, and the head of the Government Accountability Office on the companies' plans. The House Financial Services Committee planned similar session Friday.
Officials at the White House and the Treasury and Commerce departments were scouring the plans. Perino said it was "too early to say" whether the companies have outlined a path toward viability that justifies new federal assistance.
President-elect Barack Obama said it appeared that Big Three chiefs were returning to Washington with a "more serious set of plans."
The bailout faces a skeptical public. Sixty-one percent oppose providing the auto companies with billions in federal assistance, according to a CNN-Opinion Research Corp. poll released Wednesday. Fifty-three percent said it would not help the economy.
Few saw any quick impact if the U.S. auto industry were to go bankrupt -- only one in three expected to be affected immediately or in a year. Most of the rest said they thought it would affect them eventually, though nearly one-quarter said they would never feel its impact.
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Associated Press writers Erica Werner, Julie Hirschfeld Davis and Deb Riechmann in Washington, Kimberly S. Johnson in Detroit and Joe Milicia in Cleveland contributed to this report.
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