Auto Executives Seeking Bailout Likely to Go Home Empty-Handed
posted 11:19 am Wed November 19, 2008
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Washington - Congressional backers of $25 billion in emergency loans to the domestic auto industry are urging colleagues not to punish the Detroit's Big Three automakers for past mistakes. But the heads of the companies seemed to be making little headway in building support.
The CEOs of the "Big Three" automakers, General Motors, Ford and Chrysler, are pressing their case for the bailout before the House Financial Services Committee, a day after sometimes confrontational testimony before a Senate panel. Their basic message is that the government must either pay now in the form of the federal bailout or pay much more later if their industry collapses.
Committee Chairman Barney Frank, a Massachusetts Democrat, suggested the existence of a congressional bias in agreeing to help white-collar bankers but not blue-collar auto workers.
But Alabama Rep. Spencer Bachus, an Alabama Republican, said the bailout would only "push the problem further down the path."
Pleas come from some of the millions of workers who say that without some help for the auto industry, they will lose their livelihoods.
Jeff Manning, the Fairfax Union president, "This does affect each and every person in this room in one way or another... General Motors is a huge industry in this part of the state."
Rick Wagoner, the chairman and CEO of General Motors Corp., asserted, "The cost would be catastrophic: in jobs lost, income lost, government tax revenue lost, and a huge blow to business and consumer confidence."
The companies want at least $25 billion in emergency loans. Many in Congress, including leading Democrats, are skeptical.
Senate Banking Committee Chairman Christopher Dodd argued, "They are seeking treatment for wounds that, I believe, to a large extent were self inflicted. No one can say they couldn't see this coming." And Sen. Jon Tester of Montana, another Democrat, adds, "No matter how much money we put forth, if the business model isn't changed, you're still going to fail."
Some car dealers say their business has diminished by more than half. One dealer from Florida says he went from selling 385 cars a month in May to just 180 cars last month.
Still, at this point it seems highly unlikely that this lame-duck Congress will pass such a bailout.
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