By — PBS News Hour PBS News Hour Leave your feedback Share Copy URL https://www.pbs.org/newshour/economy/business-july-dec08-automakers_11-21 Email Facebook Twitter LinkedIn Pinterest Tumblr Share on Facebook Share on Twitter After Leaving Washington Empty-handed, Automakers Set to Craft Recovery Plan Economy Nov 21, 2008 12:55 PM EDT The $25 billion rescue plan for the auto industry, desperately sought by Detroit CEOs, collapsed Thursday as Congress drew the line at one more bailout. The demise of the rescue left uncertain the fate of General Motors Corp., Ford Motor Co. and Chrysler LLC, and sent Wall Street spiraling to its lowest level in years. The carmakers have been clobbered by lackluster sales and choked credit, and are battling to stay afloat through year’s end. Failure of one or more of the Big Three would be a severe further blow to the floundering economy — and to many Americans’ view of the nation’s industrial strength — and throw a million or more additional workers off the job, the Associated Press reported. But Democratic leaders scrapped votes on the auto rescue, postponing until next month a politically tricky decision on whether to approve yet another unpopular bailout at a time of economic peril, or risk being blamed for the implosion of an industry that employs millions and has broad reach into many aspects of the U.S. economy. “It is all about accountability and viability,” Speaker Nancy Pelosi, D-Calif., said at a hastily called news conference in the Capitol with other House and Senate leaders. “Until they show us the plan, we cannot show them the money.” She and Senate Majority Leader Harry Reid, D-Nev., called the news conference to pre-empt a White House-supported plan offered by senators from the states with big stakes in the auto industry, including Sen. Christopher Bond, a Missouri Republican, and Sen. Carl Levin, a Michigan Democrat, the New York Times reported. Those senators proposed loosening restrictions on $25 billion in loans that have already been approved, but for fuel-efficient and cleaner technologies. The congressional leaders said the Bond-Levin plan could not win passage this week. Instead, they said, the House and Senate will hold hearings the week of Dec. 2 to consider plans put forward by the industry. For now, however, the Democrats said the aid plan lacked the support to pass Congress and President George Bush’s veto pen. President Bush and Republicans in Congress rejected an earlier suggestion from the Democrats to draw emergency auto industry loans from the $700 billion Wall Street rescue fund. GM and Ford quickly issued statements promising to submit the blueprint the Democrats demanded. But as GM warned it could go under before year’s end, Democratic leaders were unwilling to close up shop for the year and let the industry fail. They called for a Big Three viability plan by Dec. 2, scheduled hearings that week on the report, and said a vote on a bailout could come the week of Dec. 8. “Yes, we’re kicking the can down the road, because that will give us the opportunity to do something positive,” Reid said. “But that will only happen if they get their act together.” The White House criticized the delay, saying the plan to let the automakers tap the fuel-efficiency loans for their short-term cash needs should be considered. “If there are lawmakers who want to help the automakers, and they have a path to do so, why are they going to kick the can down the road?” White House spokeswoman Dana Perino said. The chief executives of the Big Three automakers appealed personally to lawmakers for the loans this week, saying their problem was the economic meltdown that has walloped their industry — not that they were manufacturing unappealing cars. But whatever support they found sagged when it became known that each of them had flown into Washington on pricey corporate jets. Reid observed that was “difficult to explain” to taxpayers in his hometown of Searchlight, Nev. Pelosi said she had little patience left for excuses from the carmakers on why they haven’t turned their businesses around. Beyond the auto industry, lawmakers said the public has little appetite for anything else that smacks of a bailout, following the backlash against the $700 billion financial rescue. In a painful one-two punch, the auto industry also lost its most powerful defender in Congress yesterday, as House Democrats voted to oust Michigan Rep. John D. Dingell as chairman of the Energy and Commerce Committee. He will be replaced by Rep. Henry A. Waxman, D-Calif., a liberal environmentalist unlikely to have much patience with industry complaints about the high costs of auto emission standards. A day after the industry bailout talks stalled, GM told employees it will extend its holiday shutdown or make other production cuts at up to 10 factories as it deals with a continued U.S. auto sales slump and fights to stay solvent. Dave Green, president of a United Auto Workers local in Lordstown, Ohio, told the AP that workers were told Friday morning that the normal holiday shutdown will be extended until Jan. 20 at the sprawling factory complex, which stamps parts for and assembles the Chevrolet Cobalt and Pontiac G5 small cars. After Jan. 20, the Lordstown complex is expected to keep operating, but assembly line speed will be reduced from the current 62 vehicles per hour to 46.5 vehicles. Details of the other cuts were not available and GM spokesman Chris Lee would not comment on the announcements. We're not going anywhere. Stand up for truly independent, trusted news that you can count on! Donate now By — PBS News Hour PBS News Hour
The $25 billion rescue plan for the auto industry, desperately sought by Detroit CEOs, collapsed Thursday as Congress drew the line at one more bailout. The demise of the rescue left uncertain the fate of General Motors Corp., Ford Motor Co. and Chrysler LLC, and sent Wall Street spiraling to its lowest level in years. The carmakers have been clobbered by lackluster sales and choked credit, and are battling to stay afloat through year’s end. Failure of one or more of the Big Three would be a severe further blow to the floundering economy — and to many Americans’ view of the nation’s industrial strength — and throw a million or more additional workers off the job, the Associated Press reported. But Democratic leaders scrapped votes on the auto rescue, postponing until next month a politically tricky decision on whether to approve yet another unpopular bailout at a time of economic peril, or risk being blamed for the implosion of an industry that employs millions and has broad reach into many aspects of the U.S. economy. “It is all about accountability and viability,” Speaker Nancy Pelosi, D-Calif., said at a hastily called news conference in the Capitol with other House and Senate leaders. “Until they show us the plan, we cannot show them the money.” She and Senate Majority Leader Harry Reid, D-Nev., called the news conference to pre-empt a White House-supported plan offered by senators from the states with big stakes in the auto industry, including Sen. Christopher Bond, a Missouri Republican, and Sen. Carl Levin, a Michigan Democrat, the New York Times reported. Those senators proposed loosening restrictions on $25 billion in loans that have already been approved, but for fuel-efficient and cleaner technologies. The congressional leaders said the Bond-Levin plan could not win passage this week. Instead, they said, the House and Senate will hold hearings the week of Dec. 2 to consider plans put forward by the industry. For now, however, the Democrats said the aid plan lacked the support to pass Congress and President George Bush’s veto pen. President Bush and Republicans in Congress rejected an earlier suggestion from the Democrats to draw emergency auto industry loans from the $700 billion Wall Street rescue fund. GM and Ford quickly issued statements promising to submit the blueprint the Democrats demanded. But as GM warned it could go under before year’s end, Democratic leaders were unwilling to close up shop for the year and let the industry fail. They called for a Big Three viability plan by Dec. 2, scheduled hearings that week on the report, and said a vote on a bailout could come the week of Dec. 8. “Yes, we’re kicking the can down the road, because that will give us the opportunity to do something positive,” Reid said. “But that will only happen if they get their act together.” The White House criticized the delay, saying the plan to let the automakers tap the fuel-efficiency loans for their short-term cash needs should be considered. “If there are lawmakers who want to help the automakers, and they have a path to do so, why are they going to kick the can down the road?” White House spokeswoman Dana Perino said. The chief executives of the Big Three automakers appealed personally to lawmakers for the loans this week, saying their problem was the economic meltdown that has walloped their industry — not that they were manufacturing unappealing cars. But whatever support they found sagged when it became known that each of them had flown into Washington on pricey corporate jets. Reid observed that was “difficult to explain” to taxpayers in his hometown of Searchlight, Nev. Pelosi said she had little patience left for excuses from the carmakers on why they haven’t turned their businesses around. Beyond the auto industry, lawmakers said the public has little appetite for anything else that smacks of a bailout, following the backlash against the $700 billion financial rescue. In a painful one-two punch, the auto industry also lost its most powerful defender in Congress yesterday, as House Democrats voted to oust Michigan Rep. John D. Dingell as chairman of the Energy and Commerce Committee. He will be replaced by Rep. Henry A. Waxman, D-Calif., a liberal environmentalist unlikely to have much patience with industry complaints about the high costs of auto emission standards. A day after the industry bailout talks stalled, GM told employees it will extend its holiday shutdown or make other production cuts at up to 10 factories as it deals with a continued U.S. auto sales slump and fights to stay solvent. Dave Green, president of a United Auto Workers local in Lordstown, Ohio, told the AP that workers were told Friday morning that the normal holiday shutdown will be extended until Jan. 20 at the sprawling factory complex, which stamps parts for and assembles the Chevrolet Cobalt and Pontiac G5 small cars. After Jan. 20, the Lordstown complex is expected to keep operating, but assembly line speed will be reduced from the current 62 vehicles per hour to 46.5 vehicles. Details of the other cuts were not available and GM spokesman Chris Lee would not comment on the announcements. We're not going anywhere. Stand up for truly independent, trusted news that you can count on! Donate now