Big Three Automaker Bailout: Hearing, Statements, Video
Updated 10am EST Friday, December 5:
The Big Three are back on Capitol Hill today. This time their talking to Congress about getting a multi-billion dollar bailout package.
The chairman of the House Financial Services Committee says the new bleak unemployment figures makes helping the nation's beleaguered auto industry even more urgent.
Rep. Barney Frank, a Massachusetts Democrat, warned that doing nothing would be a disaster in the middle of what he called the worst economic crisis in 70 years.
Watch live video from today's hearing and check back here for more updates:
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Updated 4:20pm: Scroll down for excerpts from Thursday's hearing:
AP has a recap on Thursday's hearing with the Big Three automakers. Read an excerpt below:
U.S. automakers drew fresh skepticism from lawmakers Thursday in a rocky confrontation over their pleas for an expanded $34 billion rescue package they say they need to survive. Congressional analysts said one bailout plan under consideration would fall short of what the carmakers want.
Story continues below
advertisementWith time on the current Congress running out, opposition to the bailout appeared to be as strong as last week -- before Detroit's Big Three auto chiefs returned to Capitol Hill with more detailed plans on how they would spend the money.
Several lawmakers in both parties are pressing the automakers to consider a so-called "pre-packaged" bankruptcy in which they would negotiate with creditors in advance and downsize, then file for Chapter 11 protection in hopes of emerging quickly as stronger companies. The Big Three have publicly shunned the notion, saying it would kill sales by destroying customers' confidence -- but executives have indicated in recent days that it might ultimately be necessary...
...United Auto Worker union President Ron Gettelfinger, aligned with the industry in pressing for the aid, told senators at a Banking Committee hearing that any kind of bankruptcy, even a pre-packaged one, was not "a viable option." Gettelfinger said consumers would not buy autos from bankrupt companies, no matter the terms of the arrangement.
He also warned that in the absence of action by Congress: "I believe we could lose General Motors by the end of this month." He said the situation was dire and time was of the essence.
UPDATED 1:20pm EST - Scroll down for testimony text:
Two weeks after a botched attempt on Capitol Hill, U.S. automakers returned to Congress for high-stakes hearings they hope will persuade skeptical lawmakers to save their troubled industry with $34 billion in emergency aid, but a top Senate Democrat wants to hand their problem to the Federal Reserve.
To make matters worse for the Big Three, Senate Majority Leader Reid told the AP Wednesday "I just don't think we have the votes to do that now." Reid was of course referring to passage of the $34 billion bailout package sought by the automakers.
Excerpts From NY Times Liveblog On The Big Three Bailout Hearings:
12:40 p.m.| Is This Enough?: Mark Zandi, the chief economist of Moodys.com, is for a bailout. But he warns that recovery will be slow, in part because the carmakers' increasingly generous financial offers -- all those auto loans that are now in danger of going bad and the big price cuts -- were used to pump up demand for too long. That drained future demand.
He warns that "$34 billion may not be enough."
12:16 p.m. Eastern | It's about the jobs: Robert Nardelli, Chrysler's chief, says he is speaking on behalf of "one million people who depend on Chrysler for their jobs." He says the company's plan will yield a "product renaissance" that includes electric vehicles "similar to the one I drove here today." He also says what the automakers are asking is "the least costly alternative considering the depth of the economic crisis."
12:16 p.m. Eastern | Road trip?: Alan Mulally, Ford's chief executive, assures the panel that the company is "focused." And after a long drive to Washington to testify, he offers to return the committee's hospitality. "We invite you to visit us in Dearborn and kick the tires," he says.
12:11 p.m. Eastern | No room for scapegoats: Now a word from the workers. Ron Gettelfinger, the head of the United Auto Workers, speaks up for federal help -- but also for his members. "The U.A.W. recognizes that the crisis may require further sacrifices by the employees," he says, but the union "vigorously opposes any attempt to make workers and retirees the scapegoat." He also says it's not feasible for Congress to work out details of a complex restructuring plan in the course of the coming week.
12:07 p.m. Eastern | Learning from mistakes: Rick Wagoner, the chief of General Motors, goes first, saying that the automakers here today because they've mistakes. In the course of putting together its rescue appeal, he said, "we tried to learn from our contributions and our successes and also from our mistakes" over the course of G.M.'s 100-year history.
10:20 a.m. Eastern | Russian roulette: Christopher Dodd, the chairman of the committee, has made up his mind before hearing any witness. To turn down the automakers, he says, would be playing "Russian roulette" with the economy.
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Huffington Post will have updates through the day on the Big Three's hearing. Check back. And go here for more from the AP on its story about the Big Three in Washington.
Before the hearing, GM chief Richard Wagoner, Jr told reporters: "We're sorry to be asking for this support." Watch video of Wagoner talking to reporters:
For some insight on what might follow today's hearing, read Phil LeBeau's predictions for the Big Three:
In an industry going through as many changes as we've seen with the autos, it's probably not the smartest move to make predictions about what to expect in the next year. That said, here are my predictions.
1. Chrysler will be sold.
This isn't hard to imagine. The company is a shell of what it once was, it has just enough cash to stay out of bankruptcy, and the parent Cerberus wants to unload the company. The Big 3 will turn into the Big 2.
2. General Motors will shed brands as it restructures.
CEO Rick Wagoner loves all of GM's [GM 4.58 -0.32 (-6.53%) ] brands and will defend GM having eight, but with its bottom line being squeezed, I predict GM will want to free up research, marketing and overhead costs. Don't be surprised if one, and possibly more of GM's brands go on the block.
3. A Chinese auto maker will buy its way into the U.S. market.
Companies like Geely and SAIC have the desire to get a footprint in the U.S. and in a down market, '09 could be the time to buy a U.S. brand or slice of an auto maker.
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Huffington Post | Katharine Zaleski | December 4, 2008 09:04 AM