Big 3 Face Stiff Challenge On Capitol Hill

Auto Execs Continue To Press Case For $25 Billion Loan To Resistant Lawmakers

(CBS/AP)  Detroit's Big Three auto executives returned to Capitol Hill Wednesday to ask skeptical lawmakers for a $25 billion lifeline to keep their crippled industry from collapsing.

The heads of General Motors, Ford and Chrysler appeared before the House Financial Services Committee, making the same plea they made Tuesday to the Senate Banking Committee. But they face stiff opposition from Republicans on the Hill, as well as the White House.

Sen. Richard Shelby, the senior Republican on the Banking Committee, said Wednesday he doesn't believe there will be a turnaround in the troubled U.S. auto industry until its top management is ousted and the manufacturing model sacked.

"I don't think they have immediate plans to change their model, which is a model of failure," Shelby told CBS' The Early Show, a day after the top executives of General Motors, Ford and Chrysler came to Congress to plead for a $25 billion "bridge loan" to avert layoffs and plant closings.

"I wish they would. I know they're in dire circumstances, but somebody has to stick up for the taxpayers."

But Rep. Barney Frank, chairman of the House Financial Services Committee, told The Early Show that bankruptcy would not lead to a fresh start for the struggling companies and would only hurt others who rely on the industry.

"Bankruptcy would be very disruptive in the long term. Bankruptcy is a favorite spectator sport for politicians and experts who don't have to engage in it. You have a whole network of suppliers, small businesses and others who would get stiffed, to use the legal term, in a bankruptcy."

Frank also said bankruptcy could mean abrogation of labor contracts. "We already have too much union busting," said Frank.

Senate Majority Leader Harry Reid tried to lower expectations for emergency legislation, saying Wednesday that it's the Bush administration's responsibility to save the once-mighty carmakers from collapse.

The Nevada Democrat also said that "no one should be overly concerned" if Congress can't agree on a bill to speed $25 billion in new loans to the auto industry.

Although Reid said he still hopes Congress can reach a deal on assistance this week. If not, he said that it "will still be up to the White House and the Treasury Department" to do the job.

Local dealers also pressed their influence on Capitol Hill, blanketing congressional offices this week to make the argument to legislators that an auto bailout is necessary to prevent pillars of thousands of local communities from crumbling.

Whatever the various arguments about options, Detroit is running out of time.

Facing a less-than-receptive greeting Tuesday, General Motors Corp. CEO Rick Wagoner warned that the failure of the U.S. auto industry could lead to a loss of 3 million jobs within the first year and ripple throughout communities around the country.

"This is all about a lot more than just Detroit. It's about saving the U.S. economy from a catastrophic collapse," Wagoner said.

Dire assessments aside, the rescue plan appeared stalled on Capitol Hill, opposed by the Bush administration and Republicans in Congress who are reluctant to use the Treasury Department's $700 billion financial bailout program to come up with the $25 billion in loans.

"You're asking an awful lot," said Sen. Christopher Dodd, D-Conn. "I'd like to tell you that in the next couple of days this is going to happen. I don't think it is."

A Senate vote on an automotive bailout plan, which would also extend jobless benefits, could come as early as Thursday, but it currently lacks the support to advance.

In an op-ed essay in Wednesday's editions of The New York Times, Mitt Romney, a candidate for this year's Republican presidential nomination, wrote: "If General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won't go overnight, but its demise will be virtually guaranteed."

Romney, who was born in Detroit and whose father was an auto industry executive, wrote: "Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course - the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check."

Rank and file Republicans and Democrats from states heavily affected by the auto industry worked behind the scenes trying to develop a compromise that could speed some aid to the automakers before year's end. But it was an uphill fight.

Automakers were running into bailout fatigue on Capitol Hill. Lawmakers complained that many of the industry's problems were self-made, citing their past reliance upon gas-guzzling trucks and SUVs and opposition to tougher fuel efficiency regulations. Many wondered if the companies would be back for more money in a year.

"A lot of people think you've already failed, that your model has failed, that you're here to get life support," said Shelby.

Chrysler LLC CEO Bob Nardelli rejected suggestions that the automakers should seek Chapter 11 bankruptcy protection similar to airlines that later emerged restructured and leaner. "We just cannot be confident that we will be able to successfully emerge from bankruptcy," Nardelli said. Ford Motor Co. CEO Alan Mulally said the three automakers are highly interdependent.

The financial situation for the automakers grows more precarious by the day. Cash-strapped GM said Tuesday it would delay reimbursing its dealers for rebates and other sales incentives and could run out of cash by year's end without government aid.

Given the concerns, Democrats in the Senate discussed but rejected the option favored by the White House and GOP lawmakers to let the auto industry use a $25 billion loan program created by Congress in September - designed to help the companies develop more fuel-efficient vehicles - to tide them over until President-elect Barack Obama takes office.

House Speaker Nancy Pelosi, D-Calif., and other senior Democrats, who count environmental groups among their strongest supporters, have vehemently opposed that approach because it would divert federal money intended to develop vehicles that use less gasoline.

[prounion]

15. Porsche- nothing. Press release with condolences via the Porsche website.

16. subary- nothing.

17. Suzuki- nothing.

18. Toyota- nothing. despite claims of high sales in July and August 2001. Condolences posted on the website.

Whenever the time may be for you to purchase or lease a new vehicle, keep this information in mind. You might want to give more consideration to a car manufactured by an American-owned and / or American based company. Remember your money should stay in the country in witch you live!!

[prounion]

Ford, Chrysler and GM''s contributions after 9/11

American citizens who love foriegn auto''s... You might find this of interest that is if you are patoric:

The contributions are as follows:

1. Ford-$10 million to american red cross matching employee contributions of the same number plus 10 Ford excursions ro NY Fire Dept. The company also offered ER response team services and office space to displaced goverenment employees.

2. GM- $10 million to American Red Cross matching employee contributions of the same number and a fleet of vans,suv''s and trucks.

3. Daimler Chrysler- $10 million to support of the children and victims of the sept. 11 attack.

4. Harley Davidson motorcycles- $1 million and 30 new motorcycles to the New York Police Dept.

5. Volkswagen _employees and management created a Sept 11 Foundation, Funded initial with $2 million, for the assistance of the children and victims of the WTC.

6. Hyundai- $300,000 to the american Red Cross.

7. Audi- nothing.

8. BMW- nothing.

9. Daewoo- nothing.

10. Fiat- nothing.

11. Honda- nothing despite boasting of the second best sales month ever in August 2001.

12. Isuzu- nothing.

13. Mitsubishi- nothing.

14. Nissan- nothing.

[prounion]

and you desk jockeys couldn''t carry a autoworkers lunch box into work I have seen grown men and women break down and cry on the assembly lines at GM because the work is so intense. They do not give the money away WE EARN IT EVERY LAST CENT. GET REAL AMERICA

[prounion]

Posted by rickwar at 02:39 PM : Nov 19, 2008

Quite obvious that you are a direct beneficiary of the overwhelming salaries/benefits associated with the auto industry. Therefore, your thoughts are severely skewed.
ANYONE knows that an average cost of $70/hr and a lack of foresight has killed the auto industry. It will not survive in any form until the salary issue is addressed. We CANNOT funnel money into it if it won''''''''t change appropriately. If you truly believe that we have to pay for either keeping them afloat or even if they close - THEN CLOSE, at least we know we have reached the bottom of the well and the big three won''''''''t be back sucking more money out of us to support their dinosaur of an organization.

The media says we make 71 bucks per hour. Has anyone ever broke that down. Lets do just that in a rough estimate: 28 bucks per hour for wages thats around 58 grand a year. That leaves roughly 90 grand a year to buy my health insurance and pension, over a 30 year period thats 2,700,000. OK retirement at 30 and out that equals 3 grand a month roughly say u live 25 years after retirement thats 900,000now we have 1,800,000 left to pay for my health care.

[jsutaguy]

If they fail, there will be no "reorganization", you armchair quarterbacks:
1. They will have no credit. No credit means they can''t buy parts. No parts means no cars. No cars means total liquidation...NOT reorganization.
2. Nobody will buy a car and finance it for 5 years from a company that is bankrupt....there will be too much fear that the car will not be serviceable.
3. This is NOT like the airlines. The airlines had full access to credit to buy fuel during their bankruptcy, AND people bought tickets on those airlines cuz other airlines said they would honor them if the issuing airline didn''t. This is completely different! No loan = bye, bye to the largest manufacturing companies still left in the USA. Hello to the Fed needing to pay for the 500+ Billion in Pension Guarantees it holds on behalf of the big 3:http://tinyurl.com/5v7wu2

Failure to allow them a bridge loan is catastrophic stupidity...all for politics..

Our government is run by morons and thieves.

[jsutaguy]

I own a newer Ford, a Mercedes, and a Toyota....and they are all great cars. The Big 3 have spent the last 3 years revamping their lines, closing factories, and laying off thousands in order to become profitable....and it WORKED!

They WERE profitable before the Wall Street/GOP created economic meltdown! http://tinyurl.com/292pzx

To say that we WILL give 1.3 TRILLION DOLLARS to Wall Street banks, who hoard it to pay gigantic bonuses to their executives....but then to DENY a relatively small 25 Billion dollar bridge loan to the three largest industrial companies in the USA, employing a total of over 7 Million people, is idiocy!

If they fail, we lose 7+ million jobs (and mortgages), we convert taxpayers into unemployment check debits, we jeopardize 7 million mortgages, and we lose the ability to build our own military equipment.

This is stupidity on a colossal scale...so big, it has to be a Wall Street/GOP sellout....it''s the only answer.

[jsutaguy]

Clearly, the Big Three *are* selling what the US public is demanding...and they *ARE* profitable...until the Wall Street/GOP created economic meltdown.

1. GM outsold Toyota by about a third this year. Ford outsold Honda by about a third.. The number one selling vehicle in the USA this year is the F150 pickup....for the 32nd year in a row... The number 2 selling vehicle is the Chevy Silverado pickup...and this is DURING THE GAS CRISIS!
http://tinyurl.com/5t83ba...and this is DURING THE GAS CRISIS WITH 5$ a gallon gas in California!!

2. The questions to ask are,
"Why are Bush and Paulsen not making the banks lend the 50 Billion to the Big Three?". This is less than 3% of the money WE''VE ALREADY GIVEN TO WALL STREET!!!
"Why aren''t Bush and Paulsen making the banks lend AT ALL?". (As England did) http://tinyurl.com/5gzzlt
"Why are Bush and Paulsen, supposedly security conservatives, not concerned about the permanent failure of the 3 largest manufacturing firms in the USA? Are we supposed to buy our military vehicles from JAPAN???


3. GM had returned to profitability last year BEFORE the Wall Street corruption debacle: http://tinyurl.com/292pzx


4. If the government denies the big 3 the 25 Billion, the government (i.e. you and me) will become responsible for over 500 BILLION IN PENSIONS that are guaranteed via the Federal Pension Benefit Guarantee Corp: http://tinyurl.com/5v7wu2

5. How does denying the largest industrial companies a bridge loan make any sense at all?????

[jsutaguy]

Clearly, the Big Three *are* selling what the US public is demanding...and they *ARE* profitable...until the Wall Street/GOP created economic meltdown.

GM outsold Toyota by about a third this year. Ford outsold Honda by about a third.. The number one selling vehicle in the USA this year is the F150....for the 32nd year in a row... The number 2 selling vehicle is the Chevy Silverado...and this was DURING THE GAS CRISIS! http://online.wsj.com/mdc/public/page/2_3022-autosales.html

2. The questions to ask are,
"Why are Bush and Paulsen not making the banks lend the 25 Billion to the Big Three?". This is less than 3% of the money WE''''VE ALREADY GIVEN TO WALL STREET!!!
"Why are Bush and Paulsen not making the banks lend AT ALL?". (As England did) http://tinyurl.com/5gzzlt
"Why are Bush and Paulsen, supposedly security conservatives, not concerned about the permanent failure of the 3 largest manufacturing firms in the USA? Are we supposed to buy our military vehicles from JAPAN???
"Why is Richard Shelby saying that the failure of the big three is inevitable when GM had returned to profitability last year BEFORE the Wall Street corruption debacle?" http://tinyurl.com/292pzx

Richard Shelby,supported by Wall Street, the designated GOP spokeman for the "let the Big Three Fail" talking points, helped give over half a BILLION in taxpayer money to build Mercedes, Honda, Hyundai plants here in Alabama. http://tinyurl.com/5pmfbt http://tinyurl.com/5jykp5

[ord6591]

The auto companies burned through $18B during the past quarter, what makes you think $25B is going to make a dfifference? The auto industry has been losing jobs over the past 30 years due to bad management and inefficient production practices - reorganization is their only hope to stay marketable.

[doctxt]

EQUATION OF THE DAY:
FED LENDS OUR $ TO BANKS FOR 1% (PLUS) WE BORROW FROM BANKS @ 10 TO 20% (PLUS) 8% TAXES (EQUALS) WE FOREVER LOSE (PLUS) FED & BANKS WIN (MINUS) TRUTH (EQUALS) DEPRESSION (TIMES) MORE LIES (EQUALS) POLITICIANS (PLUS) INVESTORS (DIVIDED BY) GREED (MINUS) LAW (MINUS) GOD (EQUALS) REVOLUTION!!!

EQUATION EXPLAINED:
10 YEARS AGO-ALL OVER THE NEWS-"PEOPLE HAD TO CHOOSE-MORTGAGE PAYMENTS OR GAS FOR CARS". THEY CHOSE GAS-THE MORTGAGE INDUSRTY CRUMBLED-FED SAYS SOME FAULTY PAPER AGREEMENT BETWEEN BANKS AND INVESTORS CAUSED IT-WHEN HIGHLY PAID FEDERAL ECONOMIC GURUS LOOKED THE OTHER WAY-OIL COMPANIES REAPED $60 TO $80 MILLION A YEAR (TIMES) 10 YEARS = $800 MILLION (ONE COMPANY ALONE)-NO WONDER THE %u201CFAILOUT PLAN%u201D IS NOT ENOUGH%u2026 FORESIGHT AS GOOD AS HINDSIGHT-WHATEVER IT IS, THE PEOPLE MUST NOW PAY FOR IT.

FAILOUT PLAN IS TO BAIL OUT ILLEGAL IMMIGRANTS WHO BOUGHT AMERICAN SOIL VIA FANNIE AND FREDDIE-THEY GOT BAILED OUT FIRST TO COVER TRACKS, PLAN NOT WORKING FOR ANYONE ELSE. AFTER GOV%u2019T APPROVAL & MAE, MAC BAILOUT - GURUS CHANGE- WANT TO INVEST IN BANKS INSTEAD OF HELPING PEOPLE-NOW GURUS ADMIT ECONOMY IS IN A SLOWDOWN.

PRICE OF OIL COMES BACK DOWN, CONSUMPTION NEVER CHANGED.

ABORTION IS OK, BUT THE BILL IS ON FUTURE GENERATIONS THAT WILL BE KILLED, AND THEY ROB THE RETIREMENT EGGS OF US ALL.

THIS IS WHY WE HAVE AN ELECTORAL REVOLUTION-PEOPLE WANT CHANGE-IT WILL NOT COME FROM POLITICIANS.

THIS IS A BALANCED BUDGET-FOR THE GREEDY

[nriss1859]

i wasnt in the market for a mustang btw i was trying to make a point that ford and gm and chrysler are all about suv, trucks, and sports which most americans are not looking for.

[nriss1859]

"LETS JUST TAX TOYOTA HONDA AND ANY OTHER FOREIGN AUTO MAKER IN THIS COUNTRY TO MAKE UP THE DIFFERENCE AND WHAT HAPPENS. "
for what?
they are doing what they are supposed to.
i bought a honda accord in 08, i effn love my car.
its very safe and very fuel efficient.
if these bozos would have made something similiar i would have bought it.
i mean the new mustang is very nice but i''d be broke if i had bought one. Gas, ins, ect.
dont even say to buy a fusion or focus...that nonsense is ugly.

[tonykim42]

Steve Kroft, CBS News did not ask Obama how $150,000,000.00 donation from UAW to Obama%u2019s election
helped the big 3 auto industries to avoid their bankruptcy: The executives of 3 big auto industries have been
mismanaging their extreme resources last 30 years just like Obama had been taking
advantage of the honorable Federal Student Loan System till he decided to run for the presidency!

Neither Steve Kroft, CBS News did ask Obama how Obama%u2019s life time taking
advantage of the honorable Federal Student Loan System helped the executives of Fannie
Mae & Freddie Mac, Lehman Brothers, Bear Sterns and AIG to avoid their taking advantage
of the Washington for the duration of their organizations!

Nor Steve Kroft, CBS News did remind Obama how %u201CThe drop hollows the stone,
not by its force, but by its frequency%u201D.

[likenoone-2009]

Why did GM kill the EV1 now ask that look at who
killed the electric car

[dmgenet]

Oh and I believe a well known Japanese company is opening a new plant in the US putting more US citizens to work. The irony is heavy.

[dmgenet]

No one talks about how GM is doing very well in the rest of the world. It is only the US management team that are failing. Chapter 11; reorganize and get rid of the unproductive fat on the management teams.

[usclimey]

with the workers who want to make a decent wage, or with the management who crys about how labor costs are sinking the company while giving themselves huge pay increases.

Posted by Strangeworld

Nardelli''s salary with Chrysler is $1 per annum. Of course the $250 mil he pocketed when he left Office Depot probably aided his philanthropy.

[shelleyxjr22]

Hey, I own an insurance agency. I''m all for new car and home sales. I don''t make much commission writing an auto policy on inexpensive vehicles over 5 years old. Or on a $120,000 home policy

I''d much rather all my insureds drove new $50,000 - $75,000 Luxury vehicle. Or owned a million plus home.

However, given the current economy, banks new loan policies, guidelines and high interest rates. High ticket items and long term financing, form many consumers is now, and will be limited in the near future.

I can not see mass producing new homes or new cars. given the overall uncertain economic and insecure job market, were all faced with at this time.

What happens when the 700 Billion dollars runs out?

That''''s one of the problems in the US...consulting is not a business...it''''s a made up BS deal that allows the manager of one company or government department to line the pockets of their friends legally. We''''ve got entirely too much consulting, managing, coordinating, and "leading" and not enough working and doing.

Posted by Strangeworld at 03:15 PM : Nov 19, 2008


Time to go back to business school and learn what real consultants do. I consult small start upbusinesses on accounting, taxes, customer retention and employee training and retention. The majority clients I have, have been with me for over 18 years. This allows them to concentrate on what a good business does, make money.

"Nor have I heard that the UAW would forgo any union benefits."

Really???

Cutbacks in retiree health care worth $1 billion to GM and $850 million to Ford

Delphi: concessions to cut pay to $14 per hour for the new hires replacing the 20,000 union members who took buyouts to retire early.

UAW locals gave in to demands to reopen plant-level contracts, agreeing to the elimination of long-established work rules that once gave the UAW the power to resist management''s constant pressure for speedups

UAW Local 900 voted to approve a four-day week and 10-hour-per-day shifts at Ford''s Michigan Truck Plant to reduce overtime pay

In addition to accepting outsourcing of work, they agreed to shift many managerial duties to union employees.

Giving nothing? Shall I continue?