Big 3 await Congress' bailout decision
By Kevin G. Hall and David Lightman
McClatchy-Tribune News Service
WASHINGTON — Their fates now in the hands of lawmakers, Detroit's Big Three automakers are girding for congressional hearings later this week to determine if they'll receive a $34 billion government bailout or face the prospect that at least one of them might go bankrupt.
An estimated 3 million jobs are tied directly or indirectly to the fortunes of General Motors, Ford and Chrysler.
Yesterday they presented their plans for how they'd use government rescue money and how they plan to return to profitability. The chief executives of Ford and GM reportedly were driving to Washington in fuel-efficient cars to signal their support for accelerating production of vehicles that get better gas mileage.
The automakers promised to downsize their manufacturing operations, move faster to improve fuel economy, speed their efforts to make hybrid cars, trim their dealership networks and rein in executive pay.
Despite what's sure to be a tough battle in Congress, the troubled automakers got an important nod late last night from House Speaker Nancy Pelosi, D-Calif., who said that no U.S. carmaker would be allowed to fall into bankruptcy.
"I believe that an intervention will happen. It's pretty clear that bankruptcy is not an option. Everybody is disadvantaged by bankruptcy, including our economy," she said.
Senate Majority Leader Harry Reid, D-Nev., agreed.
"I want to do what we can to save the automobile industry — it's part of what we have left of our manufacturing base," he said.
The question is not where Congress can find the money, Reid said, but "whether there is accountability and viability. We're already spending a lot of money on a lot of things. We can't be throwing good money after bad."
The bailout math changed yesterday. An earlier call for $25 billion rose to at least $34 billion, as Ford asked for $9 billion, GM sought $18 billion and Chrysler asked for $7 billion. GM and Chrysler may have to seek bankruptcy protection soon if they don't get a short-term loan, analysts have warned.
Skepticism remains widespread in Congress — a vivid reminder of the uphill battle needed to pass the $700 billion rescue package for the financial sector in October.