Dems, White House Agree To Auto Bailout

Pelosi Bows To Bush Condition On Deal Granting $15 Billion In Loans To Big Three

(CBS/AP)  After weeks of tense discussions with the heads of the U.S. auto industry, Democratic Congressional leaders have reached an agreement that may just clear the way for the Big Three to get the money they need to survive ... for now.

CBS News correspondent Kimberly Dozier reports that significant progress came Friday night, when Democrats from both the House and Senate agreed to bail out the struggling General Motors, Chrysler and Ford with federal funds.

Several officials say the White House and congressional Democrats have agreed on $15 billion in loans, which is less than half of what the car chiefs were seeking.

They say the breakthrough came after House Speaker Nancy Pelosi bowed to a demand by President Bush that any aid come from a fund that had been intended to help Detroit produce more fuel-efficient cars.

Pelosi said the House would consider legislation next week to provide "short-term and limited assistance" to the U.S. auto industry.

The agreement came after another round of confrontational hearings, pitting exasperated lawmakers against desperate corporate heads.

Facing the automakers who returned to Capitol Hill seeking money, Rep. Jeb Hensarling, R-Tex., said, "Can you name me three industries in this economy that aren't hurting that couldn't use $34 billion? Name one that couldn't use it."

The bosses of Chrysler, Ford and GM say bankruptcy just is not an option.

"It's going to cream our revenues, said GM CEO Rick Wagoner. "And if our revenues go down like this, we will never be able to cut costs enough to get ahead of that."

As executives from Detroit pleaded with lawmakers for loans to help them survive, the government reported the worst single month's job loss in 34 years - 533,000 jobs gone in November - and an unemployment rate of 6.7%.

Officials in both parties said the legislation would include creation of a trustee or group of industry overseers to make sure the bailout funds were used to transform General Motors, Ford and Chrysler into competitive enterprises.

Democratic leaders insist this money is a loan, not a gift.

"We are writing a bill whereby the federal government will be the first to be repaid when there is some money," said Rep. Barney Frank, D-Mass.

Meanwhile, while the White House had opposed any money to the automakers to come from the $700 billion bailout package that Congress had previously assigned to the Treasury Department to assist financial institutions, President George W Bush warned that at least one of the Big Three carmakers might not survive the current economic crisis and said action must be taken next week.

Although the deal is done in principle, there are several details to be ironed out. Even last night, the reported amount of the bailout changed, by the hour, by billions of dollars.

Staffers are expected to continue meeting throughout the weekend, and the vote is expected next week.


Collateral Damage

As carmakers made their plea to Washington for a $35 billion bailout package, GM announced it will cut shifts at factories in Ohio, Michigan and Ontario in February as a result of slumping car sales.

About 2,000 jobs were involved, bringing GM's year's total of layoffs to 11,000.

Smaller players warned that if Congress didn't help the Big Three, the ripple effect could affect the entire car industry.

Paul DiMaggio, the CEO and President of Delaware Valley Corp in Lawrence, Massachusetts, warned on Friday that the "trickle down effect" would be "phenomenal" if Congress rejected a bailout.

His company, which supplies material that is used in General Motors car doors and carpet, has already felt the effects of the car makers' troubles.

Just this week he was forced to lay off three members of staff, because the plants they supply material to have been forced to shut down.

"I have looked at it, we will survive and I hope I am not convincing myself overly optimistically that we will survive," DiMaggio said.

Azure Dynamics in Woburn, Massachusetts is another example of a company feeling the effects of the car industry's uncertainty.

The company, which has 120 employees, works on parts that fit into Ford's new hybrid energy vehicles.

Vice President Dean McGrew said on Friday that his company had seen a dramatic drop-off in demand in the past two months partially because of a drop in oil prices.

[kveraldi1]

Please take a look at the DiMora Initiative - An informed perspective on the proposed $34 billion bailout of General Motors, Ford, and Chrysler and a forward-looking initiative and call to action to envision the new American automotive industry for the 21st Century.

http://blog.dimoramotorcar.com/the-dimora-initiative/the-dimora-initiative/

[kcfree2]

What gives the Big Three (or any other "private" corporation) the RIGHT to steal my money? Answer - nothing does, but corrupt Socialists who now run our government have the POWER to do it, and they could care less about our rights and freedoms. Today, if you are a failure, you are rewarded, if you succeed, you are punished. The bigger you fail, the more you get to rob the citizens of this country. The Big Three haven taken my money without my consent; the only thing I can do about it is to swear that I will NEVER buy another automobile from the Big Three!

[chloegirl4]

They want the government to keep track of the auto industry. What a joke! The government can''t take care of the government! This is the first step to socialism. The government is going to tell the car companies what cars to make and how to make them. How stupid is that. The car experts at the big three can''t even make cars that the average person wants to buy. Keep the government out of it period!!!

[mrmeatspin]

"..Pelosi Bows To Bush..congressional Democrats have agreed on $15 billion in loans..Democrats from both the House and Senate agreed to bail out..."

AGAIN


"..Pelosi Bows To Bush..congressional Democrats have agreed on $15 billion in loans..Democrats from both the House and Senate agreed to bail out "

************

i just want people to let this sink in thier heads and decide if they made the right decisions during election time

[mrmeatspin]

I think it would take about 3 years before these liberal morons would realize that bush is not that bad..

OF COURSE, THEY CAN KEEP IT IN DENIAL.

[gwinginit]

We elect a liberal big spender and he isn''t even in office yet and we spending Billions upon Billions with no controls and rampant miss use. Banks AIG, Citicorp, Now the Big Three, when does it get to little ol me? I wonder how much our corrupt congressmen are getting back in kickbacks? Corrupt politicians and Used Car Salesmen, Just a vote apart. When did Public Service become the public service trough?

[andylance1]

A billion here, a billion there, and pretty soon you''re talking real money. Perhaps we need voter oversight and demand term limits for Congress.

Detroit is doing some serious fear mongering. OH NO, Brer Fox, Please don''t throw me into Bankruptcy Court. Why, people might not buy GM if that happens. Wink Wink.

People are not buying GM anyway. That''s why the obnoxious beggars have been in Washington - besides bribing members of congress.

[usedeqbroker]

Using our tax money for the bailing out of the auto or any other company is wrong... wrong... wrong. NO one is saving my small business. It''s not fair that I should I work without a pension, without insurance, without help and scrape by while my tax money goes to people who don''t know what scraping by is... IT is WRONG!

[simplykayv]

Let me get this straight, the three auto makers in the USA want the US Government to bail them out for their missfortune? I would also like to ask the government to bail me out for my misfortune. I don''t understand how these CEO''s can manufacture auto''s and make the USA people pay high dollar for their car''s and then they receive high income, more than the average US Citizen will ever see and now they say they need help.
Well excuse me if I sound negative, but why don''t the three call it quits if they can''t run their business better. I''m ashamed to say I have a Chrysler and paid big dollar for it just to listen to the CEO''s wine and cry that they don''t have enough money to fly in their Jets or drive a new Hybrid car to ask for money. Why not give $100,000.00 to every citizen in the USA and let them pay their bills and get caught up, then they would go out and buy themselves a new car, food, homes and such so the economy would get a boost in the right places.
I don''t think this is a bad idea as we the people pay our taxes as required and we the people should be able to say where our money goes.

[simplykayv]

So let me get this straight, the three auto makers in the USA

[oneworldusa]

We need to see some layoffs alright, layoff all the CEO''''s from any company getting bailouts..they failed they are gone...then we need to lay off every single congressman and senator who voted for these bailouts. Follow the fallen dominoes of our country backwards...it all goes back to the first "WE MUST ACT QUICKLY" right after 911,now we have heard it again...6 weeks ago ,,,,was it just urgent to get our money quicker?
--------------------------------------------------------------------------------Posted by tincup356 at 10:16 PM : Dec 07, 2008

---I could not agree with you more. The CEOs care about nothing but their salaries, and their Boards of Directors, the same. All about them, not about product, quality, service or customers. The ''Big 3'' deserve to go down. Unfortunately, there are probably a lot of dedicated workers who don''t deserve that fate.

[cjs_cnet_xyz]

Foreign makers don''t have to grovel during this fiscal crisis caused by the finance industry. The finance industry didn''t even have to grovel for a bailout. Citigroup which got into more trouble could get the financing the Big 3 sought for a phone call. There is something wrong with this country that these big finance industries deserve a bailout, but the Big 3 should burn. It''s true the Big 3 have produced some stinkers over the years, but they have new leaders/workers than that earlier generation. The real problem is what the Big 3 represent: middle class jobs. The finance industry doesn''t.

Consider the finance industry''s current egregious actions. AMEX applied to be a bank holding company (it gets access to the government taxpayer bailout, 700 billion, at 1%). AMEX went through its accounts and for those only making the minimum monthly payment it decided that they were high risk. As high risk, their rates were raised to 30%. It gets taxpayer money at 1%, charges card holders 30%, and a government guarantee that its shady enterprise continues without risk of it going bankrupt. This is not only robbery, it is immoral.

Yet, American eyes and media are focused on the automobile bailout. Start with AMEX. Force them into bankruptcy and remove the crooks! Quit being mislead by this minimal automobile bailout. Get the media back where it belongs. The longer people can''t pay their debt, the longer these economy troubles continue.

[incog-nito]

The bailout might help save Detroit if they change the way they do business. The problem is, they won''t. Executive compensation in America still remains ludicrously high, with little correlation to actual performance. Most corporate strategies are only concerned with making the numbers look good for the next quarter in order to boost stock prices, so that the investment banks can cash out their holdings (and CEOs their stock options). The system is simply not designed for long-term vision.

[whitemale08]

The auto industry is the first to go, next will be the airline industry along with the electronics, textile that has already been destroyed.

[whitemale08]

Don''t ya just love globalization?

We made great cars in this country up till the 80''s when we were foced by a fake ''oil crisis'' and ''union busting'' by Ronnie Raygun to compete with Asia.

Once we tried to make small sub-compact cars like Toyota and Honda the quality went down and never recovered.

Then in the 90''s in a post-oil crisis world, Asia began making their cars bigger to where both American and Asian cars were about the same size.

However since the foreign transplants got their start by not having to pay American middle-class wages we ended up bankrupting ourselves because we refused to protect our industry like the Constitution says; through ''tarrifs''.

[tincup356]

We need to see some layoffs alright, layoff all the CEO''s from any company getting bailouts..they failed they are gone...then we need to lay off every single congressman and senator who voted for these bailouts. Follow the fallen dominoes of our country backwards...it all goes back to the first "WE MUST ACT QUICKLY" right after 911,now we have heard it again...6 weeks ago ,,,,was it just urgent to get our money quicker?

[cbsblogger]

hyundi, honda , nissen,toyota, mitsubshi today is December 7th remember "PEARL HARBOR".keep buying your rice burners japan owns half of the US now,but no fear wait until china starts selling their cars here, they''''ll pass the japanese up and own the whole US.

Posted by jsd330 at 08:26 PM : Dec 07, 2008

----------------------------

Interesting point on the anniversary of 12-7-41. Our Congress and Presidents from both Parties have worked to build up other countries at the expense of the USA. It has been obvious with Clinton, Reagan and Bush and others.

How far we''ve fallen as a nation since Pearl Harbor? We won the battle of WW2 but have lost the real economic war due to the greed, corruption and ineptness of our leaders and the power that corporations have over our government.

We lost because we have too many leaders and officials that the interests of other nations at heart....Israel, Mexico, China, Korea, Japan, etc.

[jsd330]

hyundi, honda , nissen,toyota, mitsubshi today is December 7th remember "PEARL HARBOR".keep buying your rice burners japan owns half of the US now,but no fear wait until china starts selling their cars here, they''ll pass the japanese up and own the whole US.

[hitoyou11]

This is "BAD" news. Giving the tax payers money away.

[jt_lancer]

Dems and Repubs LOVE giving away other people''s money to failing businesses, at the expense of the healthy ones. They are largely economically illiterate anyway - what do you expect?