WASHINGTON, Nov. 13, 2008
Dems Muster Votes For Big Three Bailout
But Bush Administration Is Reluctant To Use The Rescue Package — Intended For Wall Street — On The Carmakers
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Democrats in Congress are pushing to bail out the struggling big three U.S. automakers with funds from the $700 billion rescue package intended for Wall Street and the major banks. (AP Graphics)
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In-Depth Q&A: Big Three Bailout? Why Detroit's automakers might get a rescue package
Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, and Sen. Carl Levin, D-Mich., are developing legislation that would let the auto industry tap into the $700 billion Wall Street rescue money, approved by Congress last month, to fund their business operations.
General Motors Corp., Ford Motor Co. and Chrysler LLC are lobbying Congress to approve the aid, citing an economic downturn that has choked off auto sales, frozen credit and made them vulnerable. GM, the nation's largest automaker, posted a $2.5 billion quarterly loss Friday and has predicted it could run out of cash by the end of the year without government help.
"The reason why the autos are in this challenge is because of the meltdown in the financial market," said Michigan Gov. Jennifer Granholm. "They were on a restructuring path - yes, they were challenged - but this has utterly kicked them in the gut and is strangling them because they can't borrow money."
The legislation could set up a congressional showdown with the White House during President George W. Bush's final days in office. House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., are hoping for quick passage of the auto bailout during a post-election session that begins Monday.
Bush is open to helping the industry, the White House says, but the administration has expressed reservations about using the bailout money beyond the financial sector.
Treasury Secretary Henry Paulson said Wednesday that the auto sector is "critical" but that the financial industry rescue was not designed for car companies. "Any solution has got to be leading to long-term viability" for auto companies, Paulson said.
Republicans in the Senate could play a key role in whether the rescue plan advances. Some Senate Republicans who opposed the Wall Street bailout before the election have expressed skepticism that the aid would lead to changes for the companies.
Senate Republican leader Mitch McConnell of Kentucky, which is home to two Ford Motor Co. plants, was noncommittal about additional aid. In a statement, his spokesman said Congress should move to speed the release of a $25 billion loan program passed earlier to help the carmakers develop fuel-efficient vehicles.
Sen. George Voinovich, R-Ohio, who co-chairs the Senate Auto Caucus, said through a spokesman Thursday that he would support using bailout money to assist the companies because "helping the automakers remain viable is truly putting Main Street over Wall Street."
Frank's legislation would carve out a portion of the $700 billion financial rescue program for the Big Three automakers, letting the government take an equity stake in them in exchange for the loans, said Frank's spokesman, Steven Adamske.
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The Treasury could take warrants to share in a portion of future profits and would have to be paid back before any other shareholder. The car companies would face tougher restrictions on awarding pay packages to executives and dividends to their shareholders than the financial companies that get a piece of the original bailout.The reason why the autos are in this challenge is because of the meltdown in the financial market. ... This has utterly kicked them in the gut and is strangling them because they can't borrow money.
Mich. Gov. Jennifer GranholmAuto executives, labor leaders and other industry proponents are seeking an immediate $25 billion loan to keep the companies operating. Union officials are also hoping for a separate $25 billion to help cover future health care obligations for retirees and their dependents.
Beyond the car companies, lawmakers may hear from a broad coalition of manufacturers seeking aid. Auto suppliers, which carry a wide manufacturing presence in Michigan, Indiana, Missouri, Ohio, Tennessee and Illinois, are seeking a piece of the rescue.
"There's so much connection between the buyers and the manufacturers that we feel that the program has to be inclusive," said Ann Wilson of the Motor and Equipment Manufacturers Association.
The National Automobile Dealers Association, which represents nearly 20,000 new car and truck dealers, supports an automobile stabilization package, said spokesman Bailey Wood.
Executives with the Detroit automakers and the head of the United Auto Workers are expected to make their case at a hearing next Wednesday before Frank's committee. A House vote on Frank's measure could come as early as next Thursday.
Democratic leaders also are considering pairing the measure with a broader economic aid bill, including money for unemployed workers whose jobless benefits have run out, aides said.
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This is why i didn''t vote Republican like I have for decades. I''m really tired of this type of nonsense. Let''s get real about the issues. This name calling is only good for the elementary playground. Let''s get a real leader with a real agenda. Not some entertainment guru who gets paid to promote goofy songs. I keep saying it, if the Republicans don''t change their ways, they won''t see my vote again.
Russ Limbaugh call this mess "The Obama Recession."
Question: Is there any American with brains to listen to this $hit?
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CAR COMPANIES SHOULD NOT BE BAILED OUT.
WHY ARE THEY GETTING BAILED OUT WHEN THEY ARE SUPPOSED TO BE EDUCATION AND KNOWLEDGEABLE IN THEIR LINE OF WORK AND STILL RUN THEIR COMPANY INTO THE GROUND, BUT THEY ARE NOT BAILING OUT IGNORENT PEOPLE WHO SIGNED BAD MORTAGE AGREEMENTS AND RAN THEIR FAMILIES INTO THE GROUND.
EFF THE CAR COMPANIES.
MAKE THEM FILE CHAP 11!
Mich. Gov. Jennifer Granholm"
Dear Mrs. Granholm: you are an idiot.
The big 3 are in trouble because they are run by the most incompetent of idiots. Giving them loans only allows them more slack on the rope to hang themselves with. We, as Americans, have no reason to throw good money after bad.
The Big 3 need to declare bankruptcy, shed unproductive assets, and get out of the insane UAW contracts. They also need to publicly hang all of the senior executives and bring in a new set of folks that actually understand the concept of selling cars that people actually want to buy. Instead, the big 3 churn out cheap garbage that only cheapskate fleet purchasers in the government or rental car companies want.
Congress has went along with the automobile industries, and only recently imposed a mandatory MPG increase in cars and trucks, over the next few years.
It now appears that $25 billion was a nice round number, but another $50 billion would help the auto industry even more. How will state Senators and Representatives vote on this? Come on people, you know the answer to that one don''t you? Theres a
lot of money the auto industry lobbyists have to pass out.
Now as someone once said, the rest of the story.
Ford this year, is touting their Focus car as one of the best MPG cars available, with 24 mpg in city and 35 highway mpg. Sounds like a pretty good deal for the American consumer, doesn''t it. Especially with the high price of gas.
However, Ford is selling the Focus in Europe, and that auto is getting 28 mpg in the city and 50 mpg on the highway. This Ford Focus was debuted at the London auto show this summer.
If the auto industry can produce a car that averages almost 39 mpg in city and highway and sell them in Europe, why aren''t these vehicles being produced and sold in the USA?
Did I forget to mention that in Europe, Cadillac is selling their BLS that gets 29 city and 50 highway miles per gallon? Or, how about the Chevrolet Matiz that stretches a gallon of gas to the tune of, 39 city and 60 highway miles to the gallon. The list goes on and on.
Then who else should be "bailed out" in this "bad" economy? Who else has not planned for bad times?
Then where does the bailout mentality stop?
And people wonder what%u2019s wrong with America.
Companies took the short sighted look at the world and said, HEY! Let%u2019s ship jobs overseas to save costs on employees and make more money for shareholders. Up till now it%u2019s worked, but that was temporary. When the time came to pay up was due was unknown, it%u2019s here now.
The economy can%u2019t make money off of those who can%u2019t buy their product anymore. And these higher educated idiots can%u2019t seem to understand that?
What good is it going to do if those who buy cars STILL won''t or can''t buy them?
This bailout will amount to another big cash grab for the executives and greedy unions. Just like what is happening in the banking industry. Sure, so me of it may be used to keep the big three bloated carcasses afloat for a little while longer but unless through some miracle they begin to get serious and compete with better technology than the imports, there will come a day when they will be belly up again and you and I will be stuck with the tax burden.
Please, for once in your life, do something to help average hardworking Americans, put your veto pen away this time.
- by lochlan-2009 November 13, 2008 7:05 PM EST
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See all 15 CommentsTo fill your tank this summer cost about $50-$80. To charge your car to go the same distance on electricity would cost you about $5. GM will reneg on their pensions, over the next months, and pass that burden onto the tax payer in some deal with Congress. Don''t worry when times are good again in 2012, they won''t take those pensions back, of course.
"Liberty and justice for all", America is such a lie.