Congress Eyes Big Three Automakers' Plans
Detroit's Big Three auto executives have ditched their corporate jets for hybrid cars and replaced vague pleas for federal help with detailed requests for as much as $34 billion in their second crack at persuading Congress to throw their struggling companies a lifeline. Meanwhile, the United Auto Workers union offered several concessions in a bid to help the automakers.
Congressional leaders are reviewing three separate survival plans from Chrysler LLC, General Motors Corp. and Ford Motor Co. as they weigh whether to call lawmakers back to Washington for a special session next week to vote on an auto bailout.
In blueprints delivered to Capitol Hill on Tuesday, 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 is requesting a $9 billion "standby line of credit" that it says it doesn't expect to use unless one of the other Big Three goes belly up.
But Chrysler said it needed $7 billion by year's end just to keep running. And GM asked for an immediate $4 billion as the first installment of a $12 billion loan, plus a $6 billion line of credit it might need if economic conditions worsen. The two painted the direst portraits to date — including the prospects of shuttered factories and massive job losses — of what could happen if Congress doesn't quickly step in.
Democratic leaders voiced concern and a desire to do something to avert an automaker collapse, but they made no commitments about helping an industry that's made few friends lately on Capitol Hill.
"It is my hope that we would" pass legislation to help the automakers, House Speaker Nancy Pelosi, D-Calif., said. Senate Majority Leader Harry Reid, D-Nev., said he would lay the groundwork Monday for a possible vote on an auto bailout measure.
In their first round of pleas for a government rescue last month, the Big Three executives arrived in Washington on separate private jets and enraged lawmakers who said they failed to take responsibility for their companies' troubles or justify a federal bailout.
"I think we learned a lot from that experience," Ford CEO Alan Mulally said.
He, as well as GM CEO Rick Wagoner and Chrysler chief Bob Nardelli, are all road-tripping the 520 miles from Detroit to Washington in fuel-efficient hybrid cars for hearings on Thursday and Friday.
Mulally and Wagoner both said they'd work for $1 a year — something Chrysler's plan said Nardelli already does — if their firms took any government loan money. Ford offered to cancel management bonuses and salaried employees' merit raises next year, and GM said it would slash top executives' pay. Ford and GM both said they would sell their corporate aircraft.
All three plans envision the government getting a stake in the auto companies that would allow taxpayers to share in future gains if they recover.
United Auto Workers President Ron Gettelfinger said Wednesday the union will give up job protections and rework a retiree health-care trust in concessions aimed at helping automakers clinch billions in government loans to weather a severe downturn.
Gettelfinger also said the UAW would consider other changes to contracts reached in 2007 with the Big Three.
All three automakers said Tuesday that they needed new concessions from the union in restructuring plans submitted to Congress.
Gettelfinger told reporters in a news conference that the steps were the "responsible thing to do" and the union was currently engaged in discussions with the automakers to revise the contracts.
Still, an auto bailout remains a tough sell on Capitol Hill.
Sen. Arlen Specter, R-Pa., said the mood in Congress "candidly is not supportive" of the automakers, although he called the consequences of just one of them failing "cataclysmic."
"Two of the Big Three say they cannot survive until the end of the year and if one or more goes down, all three go down," Specter said at a round-table discussion in Philadelphia.
Sen. Chris Dodd, D-Conn., chairman of the Senate Banking Committee, said the automakers still need to prove they can survive and be profitable. "If these companies are asking for taxpayer dollars, they must convince Congress that they are going to shape up and change their ways," Dodd said in a statement.
His panel is to hear testimony Thursday from the auto executives, UAW chief Ron Gettelfinger, and the head of the Government Accountability Office on the companies' plans.
The House Financial Services Committee is to hold a similar session on Friday.
From the Associated Press
Copyright 2022 NPR. To see more, visit https://www.npr.org.