WASHINGTON-Chastised and having driven 525 miles from Detroit in hybrids instead of flying in corporate jets, the top executives of the Big Three U.S. automakers presented renewed pleas to Congress for federal funds to save their companies.
"We're here today because we made mistakes, which we're learning from," General Motors CEO Richard Wagoner told the Senate Banking Committee on Thursday.
During the hearing on the matter in the House on Friday, lawmakers expressed some enthusiasm for a bridge loan that would allocate around $14 billion to the car companies. This would enable the Big Three to survive until a more detailed plan could be considered when Congress begins a new session in January. An auto bailout likely would receive more support in the new Congress, which has a larger Democratic majority.
Lawmakers were also softened to the idea of a bailout after national employment numbers appeared on Friday, showing job losses of more than half a million, the worst numbers in more than 30 years.
Rep. Spencer Bachus, the ranking Republican on the House Financial Services Committee, which questioned the CEOs, expressed support for some sort of bailout, but wanted to be more convinced of the companies' long-term viability.
The companies' revised plans ask for $34 billion in aid, $9 billion more than the three executives requested in November, when lawmakers were frustrated by a presentation they deemed rag-tag. The bailout would essentially fund the downsizing of the companies, though not a shake-up of management.
"You've come a long way in two weeks," Sen. Chris Dodd, D-Conn., chair of the Senate Banking Committee, said on Thursday.
Dodd supports the auto bailout, though he conceded the chance of help was slim. In talking to The Associated Press Thursday, Senate Majority Leader Harry Reid added that he doesn't believe the Senate has the votes to pass legislation for the automakers this year. President Bush opposes the use of the economic bailout funds for the automakers. Both Democrats and Republicans continue to express skepticism for the revised plans, especially since witnesses said the $34 billion price tag could inflate.
According to Chrysler's report, the downfall of U.S. automakers would result in the loss of 2.3 to 3 million jobs, and the three executives pointed out that the ultimate cost to the country would be higher than a tax-funded investment now.
Another factor in the proposal involves the United Auto Workers union, which in its efforts to help reduce costs for the automakers has conceded some of its demands for severance pay.
As for certain plan specifics, GM proposed it would close nine plants by 2012, reduce its number of brands and dealerships, and cut up to 30,000 jobs.
GM in turn would receive $18 billion of the bailout package. Chrysler immediately would receive $7 billion in the package. Ford, on the other hand, reported that it could survive on its own, but requested a $9 billion line of credit to be available in case of emergency. Ford CEO Alan Mulally, however, said that the failure of Chrysler or GM, who are in more precipitous decline, could bring down Ford as well.
Republican lawmakers are concerned that this package will not be the last bailout the Big Three will need.
"We have our answer," Sen. Richard Shelby, R-Ala, said Thursday. "In the last two weeks, the price tag has jumped."
Shelby opposes any bailout for the automakers, though witnesses said bankruptcy, a frequently discussed alternative, would not be viable for the industry, since consumers would not purchase cars from bankrupt companies.
Meanwhile, both Dodd and Shelby criticized the Treasury Department's use of the bailout funds as "ad hoc" and "erratic."
Congress will consider the automaker bailout legislation next week during a lame duck session, after the CEOs have gone home.
"I wonder if they'll drive back," said Corker about the executives. The CEOs replied, without smiling, that they would.