Washington - The heads of the United States' three ailing
carmakers appeared before a still-skeptical Congress Thursday for the
second time in less than a month to ask for a 34-billion-dollar bail-
out they say is critical to survival in an economic recession.
General Motors Corp, Ford Motor Co and Chrysler LLC this week
submitted extensive recovery plans demanded by lawmakers as a
condition for any loan. They agreed to revamp business models, cut
wages and speed up the roll-out of more fuel-efficient vehicles.
During nearly six hours of testimony before the Senate Banking
Committee, GM Chief Executive Officer Rick Wagoner acknowledged that
past 'mistakes' had placed the US car industry at a competitive
disadvantage.
More efficient Asian models from Japanese giant Toyota Motor Corp
and others have been consistently gaining market share in the United
States over the past decade.
But the US motor industry chiefs have argued that a devastating
economic crisis struck when serious restructuring moves were showing
some signs of progress. They promised to unveil a series of new
hybrid models over the coming years.
A 'bridge loan' was needed to navigate a recession that has sent
US car sales to 25-year lows in the past two months as consumers
struggled to get loans. Both GM and Chrysler have warned bankruptcy
may be inevitable without federal aid.
'Chrysler requires this loan to get back to our transformation
that began just over one year ago,' chief executive Rob Nardelli
said, noting that his company had developed a 'sound plan for
financial viability.'
All three executives drove the more than 800 kilometres from
Detroit to the Washington hearings, after public outrage that they
arrived on corporate jets to testify in November.
But many US legislators remain unconvinced, arguing the companies'
outmoded business models would have doomed them regardless of the
current economic crisis.
Congressional leaders will be meeting over the next few days to
discuss their options, but Senate Majority Leader Harry Reid said he
still doesn't believe there are enough votes in favour of a bail-out.
Senator Richard Shelby, the top Republican on the Banking
Committee, declared he still opposed any rescue of the US auto
industry, despite the new plans.
Shelby cited the fact that the companies upped their bail-out
request from 25 billion dollars to 34 billion dollars in just two
weeks as evidence that this plea was only 'the beginning,' and
suggested a forced restructuring under bankruptcy protection may be
the best option.
Automakers warned that the bankruptcy of even one of the so-
called Big Three would further depress sales and cost millions of
jobs at a time when the US economy is already in a protracted
recession.
'People will not buy cars from a bankrupt industry,' said James
Fleming, president of the Connecticut Automotive Retailers
Association.
Mark Zandy, the chief economist of Moody's economy.com, testified
that a total of 75-125 billion dollars may be needed to keep the
companies afloat over the next two years, but he suggested delaying
bankruptcy to a later date may still be better than the 'cataclysmic'
effect an immediate failure would have on the economy.
The Bush administration has said it wants to avoid any bankruptcy,
but opposes an outright bail-out. Instead it wants to appropriate
other funds already approved by Congress, which had been connected to
specific energy improvements by the carmakers. The White House said
it was still evaluating the companies' latest plans.
But Democrats in Congress have voiced frustration over the
administration's reluctance to help the automakers while providing
hundreds of billions of dollars to struggling financial institutions.
Senator Christopher Dodd, chairman of the Banking Committee,
warned that the collapse of the US auto industry 'would affect
virtually every sector of our economy.'
'Inaction is not an option here,' he told reporters after the
hearing. Dodd said it was 'deeply disturbing' that the Treasury has
refused to divert funds from the 700-billion-dollar financial rescue
package passed by Congress in October.
The United Auto Workers (UAW) union supports the bail-out and has
agreed to reexamine its labour contracts with the carmakers to help
cut costs.
GM, the world's largest automaker, is asking for up to 18 billion
dollars, including an immediate loan of 4 billion dollars this month.
UAW President Ron Gettelfinger warned that GM could otherwise go
bankrupt by the end of the year.
Chrysler is seeking 7 billion dollars. Ford, which is widely
regarded as in the best position of the Big Three, said it may need
no help at all, but has asked for 9 billion dollars to be made
available in case of a sharper downturn.
Each CEO has agreed to work for 1 dollar for a year and cut
management benefits should they gain access to the funds.
LongbowDec 5th, 2008 - 07:54:00
It seems that the Zionist Banksters get a Trillion dollars without any accountability whatsoever and have even refused to say where that mountain of money has gone to when questioned by the peoples representatives.
What is good for the leeches and sundry bankster blood suckers should also apply to an industry that provides jobs for the people, not just in the manufacturing but in all of the infrastructure that surrounds that. How many thousands of jobs is that?
The Zionist monster that has the US Government in its grip needs it head lopping off.
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