Three big US automakers plead with Congress for US$25b lifeline

Source: Agencies  |   2008-11-19  |     ONLINE EDITION

THE three biggest US automakers pleaded with Congress yesterday for a US$25 billion lifeline to save their once-proud companies from collapse, warning of broader peril for the American economy as well.

Despite the automakers' pleas, the new rescue plan appeared stalled in Congress, opposed by Republicans and the Bush administration who do not want to dip into the Treasury Department's US$700 billion financial bailout program to come up with the US$25 billion.

Rank and file Republicans and Democrats from states heavily impacted by the auto industry worked in private trying to come up with a compromise that could speed some aid to the automakers before year's end. It was an uphill fight.

"Our industry ... needs a bridge to span the financial chasm that has opened up before us," General Motors Corp. CEO Rick Wagoner told the Senate Banking Committee. He blamed the industry's predicament not on management failures but on the deepening global financial crisis.

Also, Robert Nardelli, CEO of Chrysler LLC, told the panel the bailout would be "the least costly alternative" when compared with damage from bankruptcy.

Under questioning from skeptical senators, both said they would be willing to consider slashing their salaries to US$1 to show a willingness to sacrifice for federal help.

Sympathy for the industry was sparse, however, with bailout fatigue dominating Capitol Hill. Lawmakers bristled with pent-up criticism of the auto industry, and questioned whether a stopgap loan would really cure what ails the companies.

Senate Banking Committee Chairman Christopher Dodd, a Democrat, told Wagoner and leaders of Ford Motor Co. and Chrysler LLC that the industry was "seeking treatment for wounds that were largely self-inflicted."

Still, he said, "Hundreds of thousands would lose their jobs" if the companies were allowed to collapse.