Automakers Seek Their Own Federal Bailout

Detroit Execs, Union Leader Meet With Top Democrats In Congress To Discuss Billions In Aid

(CBS/AP)  The heads of Detroit's automakers asked congressional leaders Thursday for "immediate and necessary funding" to help the troubled auto industry weather an economic crisis.

The chief executives of General Motors, Ford and Chrysler, and the president of the United Auto Workers union met with House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid Thursday to discuss billions of dollars more in financial help for the companies.

In a statement, GM said the companies would work with Reid and Pelosi "to ensure immediate and necessary funding to keep the auto industry viable and its transformation on track during this critical time." GM said the support would "enable a competitive U.S. auto industry to contribute to our nation's economic revival." The executives declined to comment to reporters between the meetings, which were private.

They were asking for an additional $25 billion in federal loans for future health care payments for retirees.

The executives were also seeking help in accessing money from the Treasury Department or the Federal Reserve. Rep. John Dingell, D-Mich., a longtime advocate for the industry, said the meeting was productive but did not address the specifics of the industry's request.

"They're not seeking money just to spend it," he said. "They're seeking money to invest in jobs and opportunities for American workers and American industry.

In a written statement, Reid said the Bush administration "should exercise its existing authority to provide additional help to these firms," reports CBS News producer John Nolen.

Pelosi told reporters at the start of the meeting that they would discuss "how we can work together to go forward to ensure the viability of that important industry, looking out for the taxpayer and looking out for the worker."

Last month, Congress approved $25 billion in low-interest loans for domestic automakers and suppliers to retool plants to build fuel efficient vehicles. But congressional allies of the industry have said the money will not be available fast enough to help the companies.

U.S. auto sales declined to their lowest level in more than 17 years last month, prompting some auto executives to predict dire consequences if the economy doesn't improve. The companies are hoping Pelosi will include funding for the industry in an economic stimulus package if she decides to call the House back in for a lame-duck session.

Alan Reuther, the UAW's legislative director, said the executives and UAW president Ron Gettelfinger "will be making the case why additional assistance from the federal government is needed to help the companies through this severe economic credit crisis."

The Pelosi meeting with Chrysler CEO Bob Nardelli, Ford CEO Alan Mulally and GM Chairman and CEO Rick Wagoner comes at a precarious time for the industry. General Motors Corp. and Ford Motor Co. are expected to post dismal third-quarter results Friday that will show losses in the billions of dollars. Additional job cuts by both automakers also are expected Friday.

A top GM executive said Wednesday that the next 100 days will be critical for GM and the industry.

"We must be adaptable and ready to make needed changes quickly, particularly over the next 100 days," said Troy Clarke, GM's president for North America.

GM has been talking to Cerberus Capital Management LP, the majority owner of Chrysler LLC, about acquiring Chrysler. GM is reportedly seeking Chrysler's $11 billion in cash and federal aid to make the deal happen.

Auto industry officials said the companies do not intend to ask Pelosi for Congress' help in financing a merger. Gettelfinger has expressed concern that a GM acquisition of Chrysler would lead to massive job losses.

The new $25 billion in loans that the automakers want from Congress would help them make required payments to health care trust funds that were created as part of the 2007 labor deal.

Reuther said the companies are required to provide $15 billion to the fund in January 2010 and an additional $15 billion by 2012. He said the $25 billion from Congress would give the companies a better chance of immediately lining up other financing because most of the health care trust fund payments would have been covered.

"It's very important that those moneys be contributed so retirees continue to have health care," he said. "The financial community is looking at that liability, and it's a major factor in their willingness to provide loans to the companies."

The executives and Gettelfinger also want help from Congress in winning access to the $700 billion financial bailout being run by the Treasury Department and to low-rate emergency borrowing from the Federal Reserve's discount window, used in normal times by banks.

President-elect Obama expressed support for an additional $25 billion in loans on the condition that the money would go toward helping the industry build fuel efficient cars. Obama has said he would meet with industry leaders and the UAW quickly to talk about helping automakers, but a meeting has not yet been scheduled.

[tomar0317]

The American auto industry has known for years how to build alternative fuel cars and better mileage. They have chosen to side with the oil industry. Everyone in the industry is at fault. The overpaid execs to the union folks who built poor quality cars and earned way too much while doing so. Meanwhile, auto dealers and their repair shops rip us off. The unions support this rip-off. No wonder everyone is looking at other car companies. American car companies as a whole brought this on themselves. Bail yourselves out.

[bm6005]

You are completely wrong on this. Only 10% to 15% of the total energy from gasoline gets to the wheels. The rest is lost in heat and friction.....
Posted by incog-nito

Excuse me but you may notice that I was only referring to mpg, as in mpg(allon) of gas. You are correct that most of the energy is lost, been that way for 100+ yrs and if it could be higher it already would have. Engineers are always looking to maximize and they''ve been working on this for much longer than you''ve been around. My answer was related to gas fueled vehicles. Are there more efficient forms of transport? Absolutely! I wanted to address the myth of lawyers mandating the laws of physics to engineers. You cannot create more BTU''s than are inherently in a gallon of gas and there are losses in the chemical side also.

[sparks224]

aubfmet,
There is a downside to having the dirt poor workforce you conservative wing-nuts wish for.

Besides, the US auto makers aren''t going out of buisiness because of unions, it''s because of bad management.
They refuse to make this car: http://www.afstrinity.com/

[aubfmet]

It seems that if the Manufacturers want a bailout, the unions should be required to make enough concessions to make the Manufacturers competitive.
With retirement and health care, that would be a lot of concessions. But if they are not competitive, ther they are going out of business.

[element51]

bhappy2-2....Do you really think things would have been different had McCain been elected? A lot of us are hurting right now and Obama had nothing to do with bringing this on. My wife and I have lost most of our retirement and it was not Obama that took it. Instead of making your snotty little comments you had better hope that Obama can get control of this before it''s to late. If you are so sure that Obama will fail why don''t you pack up your car and go to Canada or Mexico. Or maybe Alaska when they leave the union.

[hmazzenga]

I don''t want to see another few thousand people laid off... But i''m not sure another bailout is the answer.
-Heather Mazzenga

[incog-nito]

More proof that American''''s have no concept of science. The only vehicle that can get 100 mpg is an underpowered motorcycle. A gallon of gas DOES NOT contain enough energy to take anything over 600 lbs (probably lower weight)that far. Forget your conspiracy theories of 100 mpg carburetors too.

Posted by bm6005 at 12:34 PM : Nov 08, 2008

You are completely wrong on this. Only 10% to 15% of the total energy from gasoline gets to the wheels. The rest is lost in heat and friction. If you can increase this percentage to maybe 40% then you can get much better mileage. Electric motors can do this because they have much better efficiency than gas motors. Other than batteries compressed air is also potentially an efficient way to store energy. Do some research on this, and you''ll find that getting 100mph or better is very doable and in fact has been done already. And no, it still won''t work for a Chevy Suburban.

[rational_1]

Automakers Seek Their Own Federal Bailout

And so it continues... We should start a raffle to predict the next industry to try to attach itself to the public teat - I''m betting it''ll be the airlines.

Lucky for us we have an unlimited supply of money to give out to every incompetent who can''t compete.

[habu99-2009]

Detroit has known how to make super efficient gasoline powered vehicles as well as alternative powered vehicles for years but they instead focused on gas guzzling SUVs and the enormous profits those generated. I have no doubt whatsoever that there were payoffs from Big Oil to Detroit to keep the good ol'' gasoline powered times rolling until there was no more gas. Detroit shouldn''t really care what powers their cars, but they can''t seem to shake the habit of gas guzzling engines for everything. And now they want money, our money, to help them out of the hole they dug themselves into. Don''t be fooled by the "creating jobs" smokescreen, the Big 3 will outsource anything and everything they can offshore to maximize their corporate profits and they don''t give one *** about American workers. For being the willing tool of Big Oil, these corporations need to either fail, be gobbled up by more nimble, more forward thinking foreign car makers, or have to shrink themselves down to more efficient outfits that will not only have to make good products again, but take care of the AMERICAN workers who make them.

[grandesign]

We''''re all in this together and if you wish for the US auto makers to fail you will also.
Posted by bm6005 at 12:38 PM : Nov 08, 2008

The Auto industry, like the financial industry, paid executives insane amounts of money as compared to the average worker. We weren''t in this together. If you did an analysis of the Dow 30 stocks, and compared the salaries of executives to the median wage earner, you''d find that in all these industries corruption and low accountability supported poorly developed and marketed products.

So what we are all in together, is the emergency net that is there when socialism replaces the median earners because capitalism paid so well for the top earners they didn''t do things better.

[jaykay3141]

/* I am driving a brand new Dodge Caliber loaner car right now and let me tell you, it is a whiney, underpowered, cheaply built piece of crapola. If this is what passes for a new domestic these days, please, take them out of their misery. */

And I''ve spent the last week with a rented Sebring (company''s choice, not mine) that''s full of plastic, has trouble going uphill in a headwind, and has only slightly better visibility than an Abrams tank. Chrysler wants a bailout so they can keep making this cr@p?

On another trip I had a different make rental car that could wind up to 85 mph without problems and got about 45 mpg - and it was F-f-f-f (choke, gasp, hack) French!!! So I don''t wanna hear that American manufacturers are so fantastic when they can get beat by a bunch of "grenouilles" (look it up).

Capitalism = build a good product and succeed, build a crummy product and fail. Socialism = be inefficient but stay afloat with government subsidies and bailouts. Doesn''t look to me like the Little 3 are in favor of a free market anymore, does it?

[bm6005]

Obamanomics The destroyer of the free markets free food free gas free homes free cars free health care free free free for all for ever and ever ever....
Posted by WarDogLRS

He''s not even in office yet fool! This is the "effect" from your trickle down heroes you MORON!! Let''s have more trickle down, I just love it. Got my brokerage statement today. My investments are down 30%! I''ll give you trickle down you ******!!

[bm6005]

Obamanomics The destroyer of the free markets free food free gas free homes free cars free health care free free free for all for ever and ever ever....
Posted by WarDogLRS

He''s not even in office yet fool! This is the "effect" from your trickle down heroes you MORON!! Let''s have more trickle down, I just love it. Got my brokerage statement today. My investments are down 30%! I''ll give you trickle down you ******!!

[bm6005]

BTW what business are you in? I want to make sure that I boycott YOUR industry!!


BTW I''m still waiting for your answer!

[bm6005]

Why don''''t all the US autoworkers quit and go on welfare?
Posted by spadeisspade

If you really believe that the hundreds of thousands who work directly and indirectly for the auto industry being laid off will be good for YOUR finances then please keep posting. I''ll want to see your feelings after a couple years of depression. We''re all in this together and if you wish for the US auto makers to fail you will also. BTW what business are you in? I want to make sure that I boycott YOUR industry!!

[bm6005]

I say the gov. tell them to produce a mid size sedan that gets 100 miles to the gallon ....
Posted by kaviz

More proof that American''s have no concept of science. The only vehicle that can get 100 mpg is an underpowered motorcycle. A gallon of gas DOES NOT contain enough energy to take anything over 600 lbs (probably lower weight)that far. Forget your conspiracy theories of 100 mpg carburetors too.

[trillion1]

Anerican auto makers were arrogant and stupid. Too bad congress is also.

[hennighg]

Me too! I want my own bail out! Thanks to the trickle down economics of the conservatives, I need it! Maybe with Mr. Obama, people can work, pay their way, and see a government that doesn''t ignore them. Until then, hey!, hey up there!, I want a bail out!

[wardoglrs]

Obamanomics The destroyer of the free markets free food free gas free homes free cars free health care free free free for all for ever and ever ever....

[larry969411]

what you people have to understand is auto workers are also taxpayers and Americans. Everyone has there own thoughts on what automobile to buy. But I have put 200 to 300 thousand miles on many America cars.Oh and by the way I voted for that one!