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.

[txgrouch2007]

IT WAS A DONE DEAL ALL ALONG.

This whole charade was just to PRETEND they care that MOST VOTERS OPPOSE BAILOUTS.

[txgrouch2007]

TARIFFS OR BAILOUTS?

Which is MORE HARMFUL?

Which generates IMMEDIATE REVENUE for the government?

Which would SAVE MORE JOBS?

Which one leaves the risk of the bailout recipient GOING OUT OF BUSINESS AND DEFAULTING ON $100''s OF BILLIONS OF LOANS???

After our children get stuck with paying for $100''s of billions of defaulted loans, will they be complaining more about that or about the Iraq war?

[txgrouch2007]

GM sold its key electric car patents to an OIL COMPANY (Chevron).

Chevron happens to be a MAJOR STOCKHOLDER of GM.

GM SHREDDED all existing EV-1 electric cars. Hybrid versions of the car were under development.

GM HAD ELECTRIC CARS ON THE ROAD 10 YEARS AGO - AND IT SCRAPPED THE PROGRAM FIVE YEARS AGO.

Now if GM tries to start making electric/hybrid cars again, they will have to PAY ROYALTIES TO CHEVRON to use the patents they developed.

Or, they will have to start an entirely different electric/hybrid car development ALL OVER AGAIN. That''ll take, oh, about 10 years or so.

GM FED US TO THE WOLVES. NOW THEY GOT A BIG BAILOUT.

And the imbecile voters just re-elected most of the criminals in Congress who did this to us.

[txgrouch2007]

"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.

You mean IF there is some money... BARNEY "MELTDOWN" FRANK STRIKES AGAIN!!!!

[txgrouch2007]

"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. "

Wow, she FINALLY bent over for Bush late Friday, so the story would appear OVER THE WEEKEND.

WHY IS THIS SUCH A REGULAR THING RECENTLY????

[txgrouch2007]

"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.

There''s Barney "Meltdown" Frank PROMISING that a loan will be repaid. WHERE HAVE WE HEARD THAT BEFORE?

[bozworth4]

A government FOR the people, BY the people, OF the people! Should insert the work RICH people. FACE IT TAXPAYERS, we all don''t have any politicians caring about our needs. Glad the big three can continue to make cars. Just hope some of you can afford to buy one, so the politicians can get paid back.

[clancy49]

America''s new Constitution. "..of the Corporation, by the Corporation, for the Corporation." Hello, Pelosi and all you Washington idiots. The American working poor will not be able to buy those big 3 cars. There will not be a pay back because those companies are going to fold. You cannot sell a product if you have out priced the customer. You can not sell a product if the customer doesn''t want it. The market is not going to get better. With all the DC give aways, the market is going to get worse. If you want to help Americans, cap the profits of corporations in all industries, Banking, Insurance, Retail, and Auto. Create new communities with green technology. Stop believing the lies it costs too much. Green Technology is cheaper and better yet, almost free. We will regain spendable income. Read the other blog, the oil companies bought the green technology and now charge outrageous patent fees. That doesn''t have to stop us from creating and living the cheaper life of green.

[bozworth4]

Also they will be back!! Found out how easy to get money was! They WILL be back for more!

[txgrouch2007]

Also they will be back!! Found out how easy to get money was! They WILL be back for more!
Posted by bozworth4 at 08:21 AM : Dec 06, 2008

You can COUNT on it. And COUNT ON them defaulting on the loans, so our children and our grandchildren will be paying them off.

AND paying off the coming bailouts of Social Security, Medicare, and Medicaid, especially after the Baby Boomers demand and get massive expansions in the benefits when they SUDDENLY discover their own financial crisis because they failed to save and insure themselves enough to prepare for their retirement years.

Yes, the government is now the ENEMY of the people they were supposed to serve. The alarming thing is, the imbecile voters just RE-ELECTED MOST OF the criminals in Congress who did this to us.

[txgrouch2007]

TARIFFS OR BAILOUTS?

Which is MORE HARMFUL?

Which generates IMMEDIATE REVENUE for the government?

Which would SAVE MORE JOBS?

Which one leaves the risk of the bailout recipient GOING OUT OF BUSINESS AND DEFAULTING ON $100''s OF BILLIONS OF LOANS???

[torva-2009]

This is worst than giving them nothing!

Congress should have simply said no, let the auto makers file for chapter 11 and let everyone move on.

But to give the Auto makers anything, especially in a penny-wise pound-foolish manner will only guarantee that we will prolong the big-3, the UAW, and everyone elses misery. Further, this now gives the big-3 a way out to ask for...no doubt by saying if you gave us what wee asked for in the first place...and no doubt this slow drip of aid will only result in more, not less, money.

IMPEACH CONGRESS

[whatchange-2009]

62% of America is telling these wealthy idiots in Detroit and Washington; "NO". There will not be one not one seat of any incumbent left for nest term in our legislature.

These Detroit money pits lost the keys to the kingdom and now our; I use the term loosely, legislators give them more of that which they''ve already wasted. Find jobs, Idiots. Your gravy train is coming to an end. The American people have spoken. You''ll have to work for your money from here out. we''re tired of you stealing from us to fund your friends retirements. Don''t let us find your accountants books or we''ll have a court telling you where you''ll retire.

[panhandlpete]

If American citizens want the BIG 3 to stay afloat, they must buy their vehicles.....whether they want them or not. Without sales of their products, they cannot survive.

So, use some creative sales ideas to move those vehicles. REBATES: no interest purchase period for 30 days, for trade-ins of higher gas mileage, first time car ownership, college students, senior citizens, and offer a free one-month payment deferrment during the contract life. GET THOSE AUTOS MOVING!

[johnrdoe10]

NO BAILOUT!!! These companies make bad decisions despite the downturn in the industry. In 2007 alone, Mulally spent $760,000 on "personal" (not business) corporate jet use. He has total compensation of $22 million. Ford also gave away free computers to its employees in 2000 when it was losing market share!

IN 2008, FORD GAVE OUT HUGE BONUSES TO ITS MANAGEMENT even though the company knew the upcoming years would be difficult. Now (in the SAME year) Ford is after tax payer dollars to fatten their wallets?!?!? No to Corporate Greed.

[johnrdoe10]

How many people could have stayed employed for Mulally''s $760,000 of "personal" corporate jet use??? Does he really care?

[torva-2009]

Posted by panhandlpete at 08:39 AM : Dec 06, 2008

I think we would stand to make more money buy scrapping and melting down the unsold inventory and use the material produce cars that people actually want.

The protectionism results in captive markets with no or little choice for consumers and way to much power in the hands of the manufacturers.

The only sane course of action is to say no to the bailouts and have the big three file for chapter 11.

[txgrouch2007]

If American citizens want the BIG 3 to stay afloat, they must buy their vehicles.....whether they want them or not.
Posted by panhandlpete at 08:39 AM : Dec 06, 2008

LOL! Hillary would make a law REQUIRING us to buy a USA made car. And if we fail to do so, we will be FINED by the amount of the purchase price of the car.

GOOD THING HILLARY WON''T BE MAKING THE LAWS anymore...

[txgrouch2007]

IMPEACH CONGRESS
Posted by torva at 08:33 AM : Dec 06, 2008

There will not be one not one seat of any incumbent left for nest term in our legislature.
Posted by WhatChange at 08:37 AM : Dec 06, 2008

Give up. The elections are over. The imbeciles re-elected most incumbents from BOTH parties.

The biggest problem facing humanity is humanity.

[txgrouch2007]

NO BAILOUT!!!
IN 2008, FORD GAVE OUT HUGE BONUSES TO ITS MANAGEMENT
Posted by johnrdoe10 at 08:41 AM : Dec 06, 2008

Give up. It''s a done deal.

Actually, it was all along. THEY DON''T CARE what we think, and THEY DON''T CARE how irrational it is.

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

How many people could have stayed employed for Mulally''''s $760,000 of "personal" corporate jet use??? Does he really care?
Posted by johnrdoe10 at 08:42 AM : Dec 06, 2008

Yah, that would be the annual pay for at least ten workers.

And no, they REALLY, REALLY, REALLY DON''T CARE.

At all.

[txgrouch2007]

At the beginning of the Bush years, the government went around prosecuting the corporate criminals from the Clinton years who were participating in the rampant and widely knows accounting fraud that was taking place on Clinton''s watch.

Now here comes the next band of corporate criminals. And the Democrats in Congress (Pelosi and Frank) are right there handing the loot over to them.

Hey, in the Clinton years the criminals had to steal the money THEMSELVES...

[hitoyou11]

The Dems let the tax payer down. That is just what Obama will do. Give the tax payers money away, All you that love the Dems. I don''t see you saying much now. Your boys let the all of us down. Blame this on the Republican, ?I don''t think so. Thr Dems show what they are made of. Zero. B.S. All talk. Thay is what they are made of. That is what we are in for with Obama, all talk. Get used to it. Sell out.

[pirmin3]

Hey, it''s not their money. Give it ALL away. Losers in Congress, how about every one of you morons resigning?

This is a simple case of Washington being irresponsible with taxpayer money.

Why bail out an industry that has been in trouble for more than 20 years? Exactly how will the Big 3 sell fuel efficient cars, now that gas prices have dropped so much?

Bankruptcy will be a blessing and allow them to restructure and finally achieve competitiveness. That is simply the best thing that can happen to the Big 3. We consumers will benefit from strong American car makers who can then take the fight to the imports, and also start increasing market share here in the US.

The unions are terrified of bankruptcy as that will allow management to renegotiate all terms from scratch.

While I do support federal spending programs, no good can come from an auto bailout.

[dimmu19]

For all you moron right wing clowns out there, this is a loan. Just like what was given to Chrysler before in which they paid back. I don''t here you complaining about AIG and all the other bail outs that were given to the creators of this mess...

[pirmin3]

Hey, it''s not their money. Give it ALL away. Losers in Congress, how about every one of you morons resigning?

[johnrdoe10]

How many people could have stayed employed for Mulally''s $760,000 of "personal" corporate jet use... or the massive bonuses that were handed out to Ford management in 2008???

Does Mulally really care about the working families trying to make ends meet? I do not think so.

This is a simple case of Washington being irresponsible with taxpayer money.

Why bail out an industry that has been in trouble for more than 20 years? Exactly how will the Big 3 sell fuel efficient cars, now that gas prices have dropped so much?

Bankruptcy will be a blessing and allow them to restructure and finally achieve competitiveness. That is simply the best thing that can happen to the Big 3. We consumers will benefit from strong American car makers who can then take the fight to the imports, and also start increasing market share here in the US.

The unions are terrified of bankruptcy as that will allow management to renegotiate all terms from scratch.

While I do support federal spending programs to get us out of this mess, no good can come from an auto bailout.

[pirmin3]

Hey, it''s not their money. Give it ALL away. Losers in Congress, how about every one of you morons resigning?

[txgrouch2007]

While I do support federal spending programs, no good can come from an auto bailout.
Posted by dn40 at 08:58 AM : Dec 06, 2008

Do you think tariffs would be a better solution?

[autobailout]

No socialist bailouts. Protest the auto industry bailout by signing the petition at http://www.autoindustrybailout.com/petition

[txgrouch2007]

For all you moron right wing clowns out there, this is a loan. Just like what was given to Chrysler before in which they paid back. I don''''t here you complaining about AIG and all the other bail outs that were given to the creators of this mess...
Posted by Dimmu19 at 08:59 AM : Dec 06, 2008

Hey, nice name calling, liar.

We were objecting to ALL the bailouts from the beginning.

Yah, Barney "Meltdown" Frank is PROMISING that these loans will be repaid. Unless the companies go bankrupt and DEFAULT. Where have we heard that before?

You must have a poster-size photo of "Wikid smaht" Frank hanging over your bed...

[justsaynever]

Flood your incompetent representatives with e-mail and snailmail protesting any agreement with the big3 crooks. They had years to change. And chose not to.

The auto industry will certainly survive. The new big three are already Honda, Toyota and Nissan who now make many great cars here in the US.

Use our tax dollars to fund a movement of Detroit workers to these new factories.

[txgrouch2007]

No socialist bailouts. Protest the auto industry bailout by signing the petition at http://www.autoindustrybailout.com/petit
ion
Posted by autobailout at 09:03 AM : Dec 06, 2008

What''s the point? IT''S OVER!!! IT''S A DONE DEAL!!! And IT WAS FROM THE BEGINNING.

Our government is the ENEMY OF THE PEOPLE.

And the sheeple are so angry that they JUST RE-ELECTED MOST OF THEM!!!

Yah, they''re SHAKIN'' - from LAUGHING AT US.

[justsaynever]

Flood your incompetent representatives with e-mail and snailmail protesting any agreement with the big3 crooks. They had years to change. And chose not to.

The auto industry will certainly survive. The new big three are already Honda, Toyota and Nissan who now make many great cars here in the US.

Use our tax dollars to fund a movement of Detroit workers to these new factories.

[txgrouch2007]

Flood your incompetent representatives with e-mail and snailmail protesting any agreement with the big3 crooks.
Posted by JustSayNever at 09:04 AM : Dec 06, 2008

What''s the point? IT''S OVER!!! IT''S A DONE DEAL!!! And IT WAS FROM THE BEGINNING.

Our government is the ENEMY OF THE PEOPLE.

And the sheeple are so angry that they JUST RE-ELECTED MOST OF THEM!!!

Yah, they''re SHAKIN'' - from LAUGHING AT US.

[scanfamily]

We should let them go down. For the amount of money they are requesting we could pay the wages and benefits of all that were laid off for years. Let them restructure like all of us would have to do in these circumstances. Where do I sign up for some money to help my company

[feistymomma]

I don''t agree with all of this. I am desperate for the people that will lose their jobs or already have. I have been looking for a job for a year now and I am qualified for corportate experience. Now, I wasn''t happy about the bailout with AIG. Not one little bit. Does my voice get heard? NO. Never does. What I feel is that these auto industries have been hurting for some time. It began when the "fad" of GoGreen took off. SUV''s were frowned upon. They should have dealt with it then! Now, we are saving them from the lack of consumer response. Victoria Secret is hurting too. Why not give them 1 Million. Oh, the mom and pop shop down the street is hurting... Can we give them $100,000.. I bet they wouldn''t blink twice about that much. They would be greatful! These a-holes have come back with more and more demands!

[txgrouch2007]

Eat the rich.
Posted by jbrown88881 at 09:07 AM : Dec 06, 2008

Watch out, Eloi. The Morlocks are comin'' ta get ya.

H.G. Wells, "The Time Machine."

[glenn_lewis]

Bush administration officials said Friday night that the White House is considering telling it wants to tap the unused $350 billion of the financial industry bailout. LET''S TRY TRICKLE-UP ECONOMICS. GIVE THE MONEY TO THE AVERAGE PERSON!

[iamgusotto]

Their sales are down and want money.

Instead of just giving them money, let''s use the same money and BUY the cars.
Sales would be up. the workers would be producing instead of being laid-off.
Make the companies happy and we get something for our money.

The government needs cars, the car companies need sales!

[txgrouch2007]

I don''''t agree with all of this.
Posted by FeistyMomma at 09:09 AM : Dec 06, 2008

Most of us ratinoal ones don''t agree with it.

But we rational ones consistently get outvoted.

When is anybody going to get really, really angry about it? When are we going to do what the people of Thailand just did?

When are we going to even HEAR ABOUT what the people of Thailand just did????

[feistymomma]

They came the first time asking for a certain amount... Then, the second time with "more." I love how the house has been asking them - er - drilling them with questions! I really do. Chrysler: Let''s talk about them. If we bailed them out before for "mistakes" what the hell are we doing now? AGAIN! Are they looking for another handout for making mistakes! Go under for Godsake! Ford... Well... GM....... UGH... It''s like they heard "Free Money" and came running. I was watching on Friday - and I heard Chrysler say they applied for another loan under a different name. The house had a field day. Stating, "So, if this one doesn''t go through you are going to try the other..." They back peddled. They knew all about it. It''s just stupid and so greedy. Best word for it... GREEDY. I dont care that they showed up - carpooling - (Give me a break) in a GREEN CAR! Should have done that the first time. NO -DO-OVERS! Damage done. We don''t get do-overs! Do we?

[feistymomma]

-- Posted by iamgusotto
I agree with you - but quite frankly... if given the money, I would pay bills right now. NOT PURCHASE A CAR.
I think a lot of people would agree. It''s been tight for us for a LONG LONG TIME. Why, I''ve not ridden in my private jet for about 2 years!

[feistymomma]

-- Posted by txgrouch2007
Sounds like you want an uproar. :)
Tell me, what "Rational" ones think. Please.

[clhovland]

I have many friends whom have retired from GM, I would hate to see them and thousands more loose everything they have worked for. GM needs to appoint new heads in the Company and cut back alot more, close more plants and get back to the basic car we once had.
Maybe the these 3 big Companies should look at a big American Merge

[feistymomma]

--Posted by glenn_lewis
Didn''t Obama say he would take care of us? Let''s see what happens... This is just far too frustrating. He made promises. He needs to act on some of them NOW. Not later.

[feistymomma]

Oh - what was amazing was when the House asked them if they didn''t start to see profits in 3 years, that the Gov would come in and reorg! Ford agreed, GM agreed - CHRYSLER - Nope! Didn''t agree. Said they were not "Able" to make that kind of commitment!

[mim13]

The surveys indicates, that Americans do not want a bailout of the big 3. The auto industry has continued to produce gas hog vehicles; expensive spending habits; too many assets;unions, that have carried the auto industry downward. The Americans voted for Obama for change, but given away the taxpayers, monies without any accountability was not part of the change. Now, the Americans must ask their Congressman how he/she voted and vote them out in the next election. Congress loves their benefits, expense accounts, and enormous salaries, now it is time for a change; vote the idiots out. There will always be elections.

[txgrouch2007]

Tell me, what "Rational" ones think. Please.
Posted by FeistyMomma at 09:18 AM : Dec 06, 2008

What YOU think. I was agreeing with you. Or couldn''t you tell?