WASHINGTON, Nov. 20, 2008
Dems Put Auto Bailout Vote On Hold
Congressional Leaders Demand Big 3 Automakers Show Viable Business Plan
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House Speaker Nancy Pelosi of Calif, second from left, gestures during a news conference on Capitol Hill in Washington, Thursday, Nov. 20, 2008, to discuss the auto industry bailout. From left are, House Majority Whip James Clyburn of S.C., Pelosi, Sen. Charles Schumer, D-N.Y., Sen. Christopher Dodd, D-Conn., and Senate Majority Leader Harry Reid of Nev. (AP Photo/Gerald Herbert)
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From left, Ford CEO Alan Mulally, Chrysler CEO Robert Nardelli, GM CEO Rick Wagoner, and University of Maryland School of Business professor Peter Morici testify during Tuesday's Senate hearing on the state of the auto industry. (AP)
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Tom Landwehr loads new 2009 Chevrolet Traverse vehicles at the General Motors Spring Hill Manufacturing Plant in Spring Hill, Tenn., Oct. 3, 2008. With their employers poised to announce billions more in losses and further job cuts, it's worry time once again at General Motors Corp. and Ford Motor Co. factories across the country. (AP Photo/Bill Waugh)
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Big Three Blowing In The Wind
Congressional leaders have admitted there's no overwhelming support for an auto bailout because of the disastrous results of the $700 billion economic bailout. Sharyl Attkisson has more.
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Romney To Big 3: Fold
Former Massachusetts Gov. Mitt Romney tells Maggie Rodriguez the auto industry should restructure after filing for bankruptcy instead of receiving a check to continue failed policy.
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Big Three Strapped For Cash
The top executives from GM, Ford and Chrysler were on Capitol Hill begging for a $25 bailout to save their companies from bankruptcy. Anthony Mason reports.
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In-Depth
Q&A: Big Three Bailout?
Why Detroit's automakers might get a rescue package
The demise of the rescue - at least for now - left uncertain the fate of General Motors Corp., Ford Motor Co. and Chrysler LLC, and sent Wall Street spiraling to its lowest level in years. The Dow Jones industrials dropped 445 points, the second straight plunge of more than 400, and hit the lowest point in nearly six years.
The carmakers have been clobbered by lackluster sales and choked credit, and are battling to stay afloat through year's end. Failure of one or more of the Big Three would be a severe further blow to the floundering economy - and to many Americans' view of the nation's industrial strength - and throw a million or more additional workers off the job.
CBS News correspondent Sharyl Attkisson reports that Ford has said it's now burning through a billion dollars a month; GM, the biggest of the automakers at issue and the closest to collapse, has been losing just as much; and GM told Congress it might need $4-5 billion a month to keep afloat until April.
Help may be needed but as one senator told Attkisson: "It doesn't do any good if we just give them a bigger bucket to bail."
Just Thursday, the government reported that laid-off workers' new claims for jobless aid had reached a 16-year high and the number of Americans searching for work had soared past 10 million. Congress approved a measure to extend jobless benefits through the holidays, and the White House said President Bush would quickly sign it.
Rejection of the latest bailout plan by House leaders postponed until next month a politically tricky decision for the Democratic Congress on whether to approve yet another unpopular emergency plan at a time of economic peril, or risk being blamed for the implosion of an industry that employs millions and has broad reach into all aspects of the U.S. economy.
"Until they show us the plan, We cannot show them the money," Speaker Nancy Pelosi, D-Calif., said at a hastily called news conference in the Capitol.
GM and Ford quickly issued statements promising to submit the blueprint the Democrats demanded.
Pelosi and Senate Majority Leader Harry Reid, D-Nev., said Congress might return to work in early December for a vote on aid to the carmakers - but only if they show Congress they could use the funds to transform their struggling industry into a viable one.
For now, however, the Democrats said the aid plan lacked the support to pass Congress and be signed by Bush.
Bush and congressional Republicans had balked at Democrats' suggestion to draw emergency auto industry loans from the $700 billion Wall Street rescue fund. And most Democrats were unwilling to go along with a separate, bipartisan effort backed by the White House to temporarily divert an existing program to help carmakers produce vehicles that burn less gasoline to cover the companies immediate financial needs.
But with GM warning it could go under before year's end, Democratic leaders were unwilling to close up shop for the year and appear to turn a deaf ear to the industry. They scheduled hearings the week of Dec. 2 on the automakers' viability plans and said a vote on a bailout could come the week of Dec. 8.
"Yes, we're kicking the can down the road, because that will give us the opportunity to do something positive," Reid said. "But that will only happen if they get their act together."
The White House criticized the delay, saying the plan to let the automakers tap the fuel-efficiency loans for their short-term cash needs should be considered.
"If there are lawmakers who want to help the automakers, and they have a path to do so, why are they going to kick the can down the road?" said Dana Perino, the White House press secretary.
The chief executives of the Big Three automakers appealed personally to lawmakers for the loans this week, saying their problem was the economic meltdown that has walloped their industry - not that they were manufacturing unappealing cars.
But whatever support they found sagged when it became known that each of them had flown into Washington aboard multimillion-dollar corporate jets. Reid observed that was "difficult to explain" to taxpayers in his hometown of Searchlight, Nev.
Pelosi said she had little patience left for excuses from the carmakers on why they haven't turned their businesses around.
Beyond the auto industry, lawmakers said the public has little appetite for anything else that smacks of a bailout, following the backlash against the $700 billion financial rescue.
"There is a sense that we did not do a good enough job of safeguarding the use of those funds, or providing prevention against abuse. And you could not get, I believe, through either house of Congress today what some people might think was a repeat. That's why we need to take time," said Rep. Barney Frank, D-Mass.
Even if lawmakers return to vote, they are likely to insist on numerous conditions on any loans. Democrats and Republicans alike want the government to get a chance to share in future profits by the auto companies, require them to limit executives' pay packages and prohibit use of the funds for lobbying or paying shareholders dividends.
By scrapping plans for a vote this week, the Democratic leaders effectively sidetracked a bipartisan agreement to temporarily divert the fuel-efficiency funds to cover the auto companies' operations.
Sen. Carl Levin, D-Mich., said that plan had a "reasonable chance" of passing, and that the leaders' decision to delay it was "risky and unnecessary."
"We need speed. This is a very, very important moment," Levin said.
Indeed, the Democratic Congress - having just expanded its majorities in this month's elections - was under immense pressure to show it could govern in a difficult situation.
"I can't imagine a scenario where they wouldn't come back, unless the answer is that they just don't care. And if that's the case, then the American people ought to know that," Perino said.
The leaders of the Big Three automakers have painted a grim picture of their financial position. They burned through nearly $18 billion in cash reserves during the last quarter - about $7 billion at GM, almost $8 billion at Ford and $3 billion at Chrysler. GM and Chrysler have said they could collapse in weeks.
The stakes are high. The Detroit automakers employ nearly a quarter-million workers, and more than 730,000 other workers produce materials and parts that go into cars. About 1 million more people work in dealerships nationwide. If just one of the automakers declared bankruptcy, some estimates put U.S. job losses next year as high as 2.5 million.
Meanwhile, the Big Three automakers are taking a page out of their unions' playbooks as they deploy grassroots tactics to drum up public support for the proposed $25 billion bailout.
"Mobilize Now!" cries a Web site created by General Motors Corp. at GMfactsandfiction.com. "Tell your U.S. senators and representatives that support for the U.S. auto industry is in America's best economic interest."
As GM, Ford Motor Co. and Chrysler LLC approached Congress with hat in hand, a whirl of activity in the traditional and new media intensified over the last two weeks to mount public pressure on lawmakers.
© MMVIII, CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.
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See all 223 CommentsSo to divert billions from a program that was designed as loans to re-tool for more economic vehicles for viable going concern companies to a program that gives the money to them with no strings attached is a formula for just extending the misery.
They need to file Bankruptcy and have their union contracts voided. If that occurred, they have a chance. If not we will spend billions, never get paid back and they will be out of business anyway.
Ron Gettelfinger said a bankruptcy could spawn others.
"If there''s a Chapter 11 (for) one of the companies, it will drag at least one other with them, if not all of them. And I do not believe Chapter 11 is where it will end. It will go to liquidation," he said ominously.
Why the hell should we listen to the main culprit and the main beneficiary of receiving the taxpayers money.
If it will go into Liquidation Ron, that mean there is no work out plan possible through Chapter 11 that would work and you want the taxpayers to support this?
YEAH, but you morons did have the luxury of flying in separate private jets to the Capitol.
I''ll support the bailout when your butts are on the street! Not before!
In recent years, they lobbied against any rules that would have resulted in better mileage for cars and improved safety for drivers. In other words, they lobbied against building cars that people actually want. So, I say screw them. Let them go bankrupt.
"If there''''s a Chapter 11 (for) one of the companies, it will drag at least one other with them, if not all of them. And I do not believe Chapter 11 is where it will end. It will go to liquidation," he said ominously.
Another way of saying what he is saying is that the UAW will not negotiate their contracts under a pre-packaged Chapter 11 filing. That would be enough to send it into liquidation.
This is a threat, screw him.
If we really want to fix Detroit we should follow his idea.
............................ Actually if we wanted to fix America we should have elected Mitt Romney as the POTUS.
But instead we elected the most unqualified candidate to ever run.
It''s time to get MAD AS H*E*L*L and tell them we won''t take it anymore. The big 3 are businesses - and should use the avenues available to them to remedy their situation - this does not include a government hand out. The big 3 have NOT presented any plan to change their operation - they only want money to span the gap until their NEXT flawed concept to bring them back to profitability gets underway. Their way is done - DO NOT SUPPORT CONTINUING AT ALL.
1. The only way they could pay back any funds is by becoming profitable. If they could have done that before, they would not now be before Congress.
2. Because primarily of union labor costs, they are not competitive with the Toyota/Nissen/etc brands. And as long as this continues, they never will be.
3. Both auto management and the union management are not really committed to the big 3 financial well being. Everybody saw the jets that carried the auto Presidents to DC. None of them would commit to selling these perks. Auto executives enjoy numerous other perks but cannot seem to eliminate very many of them. This morning, I saw a UAW news conference. Much smoke but I did not see anywhere where the unions were willing to bend on their labor contracts.
3. This thing about the dealers going under does not ring true. Although there are exceptions here and there, the vast majority of dealers a long time ago changed to a multi brand operation. Today, most dealers sell domestic vehicles and foreign vehicles (Toyota/Nissen/Mazda for example). These other brands will carry the dealers through this crisis.
About the only real alternative is for the big 3 to declare Chapter 11 which will limit perks and allow current UAW labor contracts to be renogotiated.
So why is he in washington begging for money now? I will tell you why because its free money being handed out in Washington these days, why not get his?
This has got to stop.....
Posted by william8110 at 02:09
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Hey bigot william8110 ........go jump off a bridge
Posted by perceptions5 at 02:11 PM : Nov 20, 2008
Uhhh, he grew up in Michigan and his father was the President of American Motors.
Posted by william8110 at 02:14 PM : Nov 20, 2008
Going thru life fat, lazy and stupid is no way to live your life son.
So to divert billions from a program that was designed as loans to re-tool for more economic vehicles for viable going concern companies to a program that gives the money to them with no strings attached is a formula for just extending the misery.
They need to file Bankruptcy and have their union contracts voided. If that occurred, they have a chance. If not we will spend billions, never get paid back and they will be out of business anyway.
Ron Gettelfinger said a bankruptcy could spawn others.
"If there''''s a Chapter 11 (for) one of the companies, it will drag at least one other with them, if not all of them. And I do not believe Chapter 11 is where it will end. It will go to liquidation," he said ominously.
Why the hell should we listen to the main culprit and the main beneficiary of receiving the taxpayers money.
If it will go into Liquidation Ron, that means there is no work out plan possible through Chapter 11 that would work and you want the taxpayers to support this?
FACT 1 - auto execs stated belief of no one buying cars if they are in bankruptcy is just that - their belief and certainly very self serving. No data exists and many experts do not believe that to be the case. Some airlines were in bankruptcy while others weren''t - but people still bought tickets well in advance of travel dates on the airlines in bankruptcy.
FACT 2 - many posters here throw around the $500B retirement plans that would need to be covered by the government - they freely use that figure which if the total, but always forget to include that the overwhelming majority of that is already subsidized and can always be alter by changing the laws.
Get off the board, your boring all of us.
Posted by dvillegas43 at 02:21 PM : Nov 20, 2008
That is not true, I thought the Republicans for big business remember?
If that is true, the Obama need only wait till January and he can pass the money ot them because they all supported him, yeh thats a great reason.
FACT 4 - Bankruptcy is the ONLY way to cut the UAW and it''s members back to a resonable wage/benefits structure. The current $70/hr quoted is ridiculous - reducing this to an appropriate level of about $42/hr is ABSOLUTELY NECESSARY for the industry to survive.
FACT 1 - auto execs stated belief of no one buying cars if they are in bankruptcy is just that - their belief and certainly very self serving. No data exists and many experts do not believe that to be the case. Some airlines were in bankruptcy while others weren''''t - but people still bought tickets well in advance of travel dates on the airlines in bankruptcy.
FACT 2 - many posters here throw around the $500B retirement plans that would need to be covered by the government - they freely use that figure which if the total, but always forget to include that the overwhelming majority of that is already subsidized and can always be alter by changing the laws.
Posted by craigh9 at 02:21 PM : Nov 20, 200
excellent points
Posted by dvillegas43 at 02:21 PM : Nov 20, 2008
Support/opposition is bipartisan.
Moron
Democrats are failing in Congress. Senator Harry Reid, Speaker Pelosi, Rep Barney Frank, Sen. Christopher Dodd, Sen. Chuck Schumer.....all are getting tense because they can''t pass a bill to "fix" the Auto Big 3.
They have attitudes because 3 Auto CEOs flew to Washington, D.C. in private jets. Sen. Reid keeps using that line.
What was Speaker Pelosi doing flying around in a USAF jet during the August break selling her book at Government expense? (because she''s 3rd in line to be President)
Do Congressmen/women and Senators fly in Coach?
How about First Class?
Not gonna work this time and with the current failures of the Bank Bailout being discussed daily, no way he decides to do this quickly in January if it is not done before he gets there.
This is all politics.
Good call Reid and Pelosi
He refuses to put on the Senate floor an alternative to the bill he pushed that absolutely will not pass because they can''t get the votes.
The other bill he refuses to debate or vote on is one that the President will sign if it passes Congress. It allows the $25 Billion approved and authorized for retooling to be used for loans that have to be repaid to the Treasury with interest; and can then be used for retooling purposes. It would actually have a net gain to Treasury because of interest collected.
The alternative is to do NOTHING, and Sen. Reid goes to Nevada for a 2-month vacation because he doesn''t care. It''s his way or nothing.
All 3 Big Auto companies could be in Chapter 11 before President Elect Obama is sworn in January 20, 2009.
I hear it argued that we must save the automakers to save jobs. But the total number of jobs provided by automakers and those dependent upon services to automakers account is only 846,000 positions. Yes this sounds big, but Walmart alone has 1.4 million employees. And furthermore, yesterday the automakers stated auto sales will be down to 10 million annually (from the 15 million last year). That to me says job losses/consolidation regardless of whether they get the money. And furthermore, they stated this money will only get them through March. Why are we not investing in our roads, alternative forms of energy, etc?....each which would create millions of jobs?
Any bailout should be spent on fixing the housing crisis or it won''t matter if GM/Ford/Chrysler survive. If you can''t afford your mortgage payment, you surely aren''t going to buy a car.
If we don''t stop this bailout, this will set a precedent for the airlines to be next, then hotels/travel industry, then restaurants, etc. It''s got to stop.
Contact Congress and tell them to vote no.
http://www.emailthecongress.com
Posted by william8110
Congress and Senate pass this bill right ????
How about First Class?
Posted by Myhog6 at 02:31 PM : Nov 20, 2008
Actually true story here. I was on a Delta flying from Washington Reagan. The weather and everything was fine but we were delayed due to "maintenance" Saw no maintenance people, this was over 90 minutes. Everyone was seated and dealing with it, they would not let us off the plane.
In walks Senator Dodd and immediately we are ready to take off. I was told on the side after the flight that his office called and said he was stuck in traffic and requested the plane be held.
He was sitting in coach BTW. But can you imagine the ego and self importance to make almost 150 people wait for him.
Hopefully the trials for genocide and crimes against humanity will be next.
Keep up what you are doing and in 2 years we will remove more of you. This bail out will take place either now or in 2 months but in months the damage will be far more massive. When you become like it was in the great depression you will then see how you need to make certain that controls are kept in place from the begining.
Keep up what you are doing and in 2 years we will remove more of you. This bail out will take place either now or in 2 months but in months the damage will be far more massive. When you become like it was in the great depression you will then see how you need to make certain that controls are kept in place from the begining.
Posted by antoniof123 at 02:43 PM : Nov 20, 2008
No way and if it does, there will be an uprising and backlash that the dems are too arrogant to see right now.
Hopefully the trials for genocide and crimes against humanity will be next.
There is no place for his posts here.
LOL Your argument makes no sense. Because some Company MAY in the future sometime want help or a loan, we should deny this loan. I just want to make SURE that those who are opposed to the loan, who want to allow the Bankruptcy, I just want to make sure the AMERICAN WORKERS know who they are. IF the Big Three go under they are going to take a LOT and I do mean a LOT of Companies with them. There are so many Companies out there operating on a shoe string because of the unfair trade agreements, it will take VERY little to put them under. When those workers start looking for someone to blame, someone to throw under the bus, I just want to make SURE they understand who those people are. For some reason I just do not think the Fascist Republican''s have a clue how mad these workers are, how tired they are of being abused and trashed. LOL
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