Automakers Ask Congress for 'Immediate' Funding
Thursday, November 06, 2008
DETROIT " Detroit's automakers appealed to congressional leaders Thursday for $25 billion more in federal loans, low-interest emergency borrowing and a share of the Wall Street bailout to help rescue an ailing industry battered by the economic crisis.[/b][/ul]
The talks with House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., came as General Motors Corp. and Ford Motor Co. were poised to announce billions more in losses and further job cuts Friday, and as GM's president for North America said the next 100 days would be critical for his company and the industry.
GM, Ford and Chrysler LLC pledged to work with the leaders "to ensure immediate and necessary funding to keep the auto industry viable and its transformation on track during this critical time," according to a GM statement.
Pelosi told reporters at the start of the meeting that the discussions would focus on "how we can work together to go forward to ensure the viability of that important industry, looking out for the taxpayer and looking out for the worker."
Later in the day she said: "It is essential that we preserve our manufacturing and technology base in this country. Today, the
Democratic leadership discussed how to protect hundreds of thousands of workers and retirees, safeguard the interests of American taxpayers, and use cutting-edge technology to transform blue-collar jobs to green collar jobs for generations to come."
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[/align]GM said the additional federal support would allow "a competitive" auto industry "to contribute to our nation's economic revival." The executives, who were joined by the president of the United Auto Workers, declined comment to reporters between the private meetings.
They sought an additional $25 billion in federal loans for future
health care payments for retirees. They also want lawmakers' help in winning access to the $700 billion financial bailout being run by the Treasury Department and to low-rate emergency borrowing from the Federal Reserve's discount window, used in normal times by banks.
The loans would help the companies make required payments to health care trust funds that were created as part of a 2007 labor deal.
Last month,
Congress approved $25 billion in low-interest loans for domestic automakers and suppliers to retool plants to build fuel efficient vehicles. But congressional allies of the industry have said the money will not be available quickly enough to help.
Rep. John Dingell, D-Mich., a longtime advocate for the industry, said the meeting was productive but did not address the specifics of the industry's request.
"They're not seeking money just to spend it," he said. "They're seeking money to invest in jobs and opportunities for American workers and American industry.
U.S. auto sales declined to their lowest level in more than 17 years last month, leading some executives to predict dire consequences if the economy did not improve. The companies want Pelosi to included the new money in an economic aid plan if the House returns for a postelection session.
Alan Reuther, the UAW's legislative director, said the executives " Chrysler's Bob Nardelli, Ford's Alan Mulally and GM's Rick Wagoner " and union president Ron Gettelfinger came to Washington to make the case for more federal assistance "to help the companies through this severe economic credit crisis."
GM has talked to Cerberus Capital Management LP, the majority owner of Chrysler LLC, about acquiring Chrysler. GM reportedly is seeking Chrysler's $11 billion in cash and federal aid to make the deal happen.
Auto industry officials did not expect the companies to ask Pelosi for Congress' help in financing a merger. Gettelfinger has expressed concern that a GM acquisition of Chrysler would lead to massive job losses.
On the health care issue, Reuther said the companies are required to provide $15 billion to the fund in January 2010 and an additional $15 billion by 2012. He said $25 billion more from Congress would give the companies a better chance of immediately lining up other financing because most of the health care trust fund payments would have been covered.
President-elect
Obama expressed support for an additional $25 billion in loans on the condition that the money would go toward helping the industry build fuel efficient cars. Obama has said he would meet with industry leaders and the UAW quickly to talk about helping automakers. A meeting has yet to be scheduled.
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Open your wallets widefolks, this is just the first wave, the states with failing budgets and out of control spending are already in line. [:@]
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Here come the hogs
