Detroit's Big Three Appear To Be Preparing For The Worst
Friday, December 05, 2008SUSIE GHARIB: On Capitol Hill, day two of testimony by the heads of Detroit's big three auto makers, as news out of the motor city continued to get worse. General Motors announced 2,000 layoffs at plants in Ohio, Michigan, and Ontario and Chrysler hired the bankruptcy advisory firm Jones Day. As Stephanie Dhue reports, law makers are still not convinced about giving government loans to the auto makers and just where that money would come from.
STEPHANIE DHUE, NIGHTLY BUSINESS REPORT CORRESPONDENT: As the auto CEO's continued to plead their case, the faltering economy drove the debate. Financial Services Chairman Barney Frank told the CEOs any loans would be for the greater good of the country.
REP. BARNEY FRANK, CHAIRMAN, HOUSE FINANCIAL SERVICES: For us to do nothing, to allow bankruptcies and failures in one, two or three of these companies in the midst of the worst credit crisis and the worst unemployment situation that we've had in 70 years would be a disaster.
DHUE: President Bush supports letting the auto industry tap into a $25 billion Department of Energy fund that already exists, but hasn't been doled out.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: It is important that Congress act next week on this plan. And it's important to make sure that taxpayers' money be paid back if any is given to the companies.
DHUE: But taking money from the energy program doesn't sit well with environmentalists. And some law makers, like New York's Carolyn Maloney, worry the money will be used to fight new fuel efficiency mandates.
REP. CAROLYN MALONEY, (D) NEW YORK: Why in the world should my constituents or taxpayers in New York state or any state provide $38 billion in loans for your companies if you will continue to attempt to undo laws that we have adopted in our states? Wouldn't that be the equivalent to giving your money to sue us?
DHUE: The congressional leadership wants any funding to come out of the $700 billion troubled asset relief fund or TARP. Michigan Republican Thaddeus McCotter suggests splitting the difference.
REP. THADDEUS MCCOTTER, (R) MICHIGAN: Half of the bridge loan come from the TARP funds for the prevention of foreclosures and that half of the funds come from the Department of Energy loans for the preservation of the research and development in green technologies, in which the auto industry already engages.
DHUE: With time running short, Pennsylvania Democrat Paul Kanjorski suggests passing a $4 billion bridge loan for General Motors and coming back with a more substantial restructuring plan later.
REP. PAUL KANJORSKI, (D) PENNSYLVANIA: I'm afraid a lot of people are over-estimating the willingness of a goodly number of members of Congress to play chicken.
DHUE: That game of chicken is likely to continue into next week. Key lawmakers will be working over the weekend to craft a package by Monday. Votes could take place Wednesday or Thursday. Stephanie Dhue, NIGHTLY BUSINESS REPORT, Washington.
