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Renegade
12-06-2008, 07:45 AM
Sat Dec 6, 2008 12:12am EST


By Thomas Ferraro and John Crawley

WASHINGTON (Reuters) - Congressional Democrats and the White House have reached agreement on emergency aid for U.S. automakers of between $15 billion and $17 billion, two senior congressional aides said on Friday.

The outline of the package was reached after auto executives pleaded with lawmakers for help and U.S. data showed employers axed more than 533,000 jobs in November, the highest monthly job loss in 34 years.

"Congressional Democrats and the White House have reached an agreement," a senior congressional aide said.

Another source said negotiators had "agreed in principle to moving ahead but details have to be worked out." More talks were expected on Saturday with Congressional votes on a bill next week.

The temporary funding amount is far less than the $34 billion in loans requested this week by General Motors, Ford Motor, and Chrysler, but it would keep them going into next year.

Daniel Weiss, a senior fellow with the Center for American Progress, said he expected Democratic lawmakers to seek more money for automakers after a new Congress meets and Barack Obama is sworn in as president on January 20.

"A short-term loan agreement is like putting a Band-Aid on a hemorrhage and they will still have to try and save the patient in January," said Weiss.

The automakers say they need help to survive a sharp downturn in sales fueled first by the credit crisis and now recession.

At hearings this week, many lawmakers were skeptical of the automakers' viability, arguing they had failed in the past to cut sufficient costs, ween themselves from making gas guzzlers and produce innovative cars consumers want to buy.

FUNDING TUSSLE

Earlier on Friday, U.S. House of Representatives Speaker Nancy Pelosi dropped her insistence that aid come from the $700 billion financial services bailout fund the Bush administration had refused to use for automakers.

Rep. John Dingell, a Michigan Democrat and long-standing ally of the auto industry, said in a statement the money would come from a $25 billion Energy Department loan fund approved in September to help auto companies meet new fuel-efficiency standards -- an idea the White House has promoted.

In a statement, Pelosi had suggested she could agree with that source of funds under certain conditions.

"We will not permit any funds to be borrowed from the advanced technology program unless there is a guarantee that those funds will be replenished in a matter of weeks so as not to delay that crucial initiative," she said.

Compromising on the source of funds would likely build bipartisan support in Congress for a bill that could be signed into law by President George W. Bush, a Republican.

"This is a good beginning. We will work with leadership to see that it becomes law. Then next year we will work with President-elect Obama for a permanent solution," Dingell said.

Resolving the funding source has been the biggest roadblock so far to reaching an aid agreement. While Democrats and Republicans have agreed broadly in recent weeks that conditions -- like limits on executive compensation -- must accompany any assistance, there are differences on other benchmarks as well as whether government should oversee any restructuring.

White House spokesman Tony Fratto declined to comment on any discussions related to the automakers' bailout.

Both Pelosi and Senate Majority Leader Harry Reid said in statements they expected to have votes next week on an automaker assistance plan.

DISASTER FEARED

Congress and the White House are anxious to prevent the threatened near-term collapse of one or more of the Detroit Three -- which directly employ 250,000 people.

"In the midst of the worst economic situation since the Great Depression it would be an unmitigated disaster," said Rep. Barney Frank, chairman of the House Financial Services Committee, at a hearing with the chief executives from the automakers.

GM and Chrysler have asked for immediate loans to forestall possible failure, while Ford is asking for a $9 billion credit line that would be tapped later if necessary. GM wants $12 billion in loans, with $4 billion of that immediately, as well as a $6 billion credit line. Chrysler wants $7 billion.

Chrysler CEO Bob Nardelli told Frank's committee on Friday the company needs $4 billion to run operations through March. Over the same time frame, GM CEO Rick Wagoner said his company needs $10 billion to keep going.

Ford CEO Alan Mulally said again in testimony his company does not immediately need to use federal funds.

The automakers said they were encouraged by the developments and the plans for votes next week.

Meanwhile, GM, Ford and Chrysler appealed to the Canadian and Ontario governments for billions in emergency loans against a backdrop of fresh layoffs at Ontario assembly plants. "We're fighting for our survival," said Reid Bigland, president and chief executive of Chrysler Canada.

(Additional reporting by John Poirier and Kevin Drawbauh, David Bailey in Detroit; editing by Tim Dobbyn and Todd Eastham)
Lawmakers and White House agree on auto aid plan
Sat Dec 6, 2008 12:12am EST

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By Thomas Ferraro and John Crawley

WASHINGTON (Reuters) - Congressional Democrats and the White House have reached agreement on emergency aid for U.S. automakers of between $15 billion and $17 billion, two senior congressional aides said on Friday.

The outline of the package was reached after auto executives pleaded with lawmakers for help and U.S. data showed employers axed more than 533,000 jobs in November, the highest monthly job loss in 34 years.

"Congressional Democrats and the White House have reached an agreement," a senior congressional aide said.

Another source said negotiators had "agreed in principle to moving ahead but details have to be worked out." More talks were expected on Saturday with Congressional votes on a bill next week.

The temporary funding amount is far less than the $34 billion in loans requested this week by General Motors, Ford Motor, and Chrysler, but it would keep them going into next year.

Daniel Weiss, a senior fellow with the Center for American Progress, said he expected Democratic lawmakers to seek more money for automakers after a new Congress meets and Barack Obama is sworn in as president on January 20.

"A short-term loan agreement is like putting a Band-Aid on a hemorrhage and they will still have to try and save the patient in January," said Weiss.

The automakers say they need help to survive a sharp downturn in sales fueled first by the credit crisis and now recession.

At hearings this week, many lawmakers were skeptical of the automakers' viability, arguing they had failed in the past to cut sufficient costs, ween themselves from making gas guzzlers and produce innovative cars consumers want to buy.

FUNDING TUSSLE

Earlier on Friday, U.S. House of Representatives Speaker Nancy Pelosi dropped her insistence that aid come from the $700 billion financial services bailout fund the Bush administration had refused to use for automakers.

Rep. John Dingell, a Michigan Democrat and long-standing ally of the auto industry, said in a statement the money would come from a $25 billion Energy Department loan fund approved in September to help auto companies meet new fuel-efficiency standards -- an idea the White House has promoted.

In a statement, Pelosi had suggested she could agree with that source of funds under certain conditions.

"We will not permit any funds to be borrowed from the advanced technology program unless there is a guarantee that those funds will be replenished in a matter of weeks so as not to delay that crucial initiative," she said.

Compromising on the source of funds would likely build bipartisan support in Congress for a bill that could be signed into law by President George W. Bush, a Republican.

"This is a good beginning. We will work with leadership to see that it becomes law. Then next year we will work with President-elect Obama for a permanent solution," Dingell said.

Resolving the funding source has been the biggest roadblock so far to reaching an aid agreement. While Democrats and Republicans have agreed broadly in recent weeks that conditions -- like limits on executive compensation -- must accompany any assistance, there are differences on other benchmarks as well as whether government should oversee any restructuring.

White House spokesman Tony Fratto declined to comment on any discussions related to the automakers' bailout.

Both Pelosi and Senate Majority Leader Harry Reid said in statements they expected to have votes next week on an automaker assistance plan.

DISASTER FEARED

Congress and the White House are anxious to prevent the threatened near-term collapse of one or more of the Detroit Three -- which directly employ 250,000 people.

"In the midst of the worst economic situation since the Great Depression it would be an unmitigated disaster," said Rep. Barney Frank, chairman of the House Financial Services Committee, at a hearing with the chief executives from the automakers.

GM and Chrysler have asked for immediate loans to forestall possible failure, while Ford is asking for a $9 billion credit line that would be tapped later if necessary. GM wants $12 billion in loans, with $4 billion of that immediately, as well as a $6 billion credit line. Chrysler wants $7 billion.

Chrysler CEO Bob Nardelli told Frank's committee on Friday the company needs $4 billion to run operations through March. Over the same time frame, GM CEO Rick Wagoner said his company needs $10 billion to keep going.

Ford CEO Alan Mulally said again in testimony his company does not immediately need to use federal funds.

The automakers said they were encouraged by the developments and the plans for votes next week.

Meanwhile, GM, Ford and Chrysler appealed to the Canadian and Ontario governments for billions in emergency loans against a backdrop of fresh layoffs at Ontario assembly plants. "We're fighting for our survival," said Reid Bigland, president and chief executive of Chrysler Canada.

(Additional reporting by John Poirier and Kevin Drawbauh, David Bailey in Detroit; editing by Tim Dobbyn and Todd Eastham)

jason
12-07-2008, 05:43 PM
http://www.washingtonpost.com/wp-dyn/content/article/2008/12/07/AR2008120701446.html (http://www.washingtonpost.com/wp-dyn/content/article/2008/12/07/AR2008120701446.html?referrer=digg)

Dodd Says GM Chief Should Step Down


One of the chief architects of a plan to bail out the Detroit auto companies said today that General Motors Chairman G. Richard Wagoner should be forced to give up his post as a condition of receiving emergency loans from the federal government.



"I think you have got to consider new leadership. If you're going to really restructure this, you have got to bring in a new team to do this, in my view," Senate Banking Committee Chairman Christopher J. Dodd (D-Conn.) said on CBS's "Face the Nation."
Asked specifically about Wagoner, Dodd said: "I think he has to move on."

Ought Six
12-07-2008, 07:55 PM
Any aid should be coupled with requirement for a bankruptcy reorganization plan. The aid should only be aimed at making the bankruptcy process orderly to stave off a catostrophic collapse. Anything else is a waste of money, IMO.

jason
12-07-2008, 10:50 PM
YouTube - Ron Paul on the Auto Bailout

Ought Six
12-07-2008, 11:20 PM
UAW Chief Fears Collapse of GM (http://abcnews.go.com/ThisWeek/Story?id=6411642&page=2)


'Let's All Make Equal Sacrifice,' Union Leader Gettelfinger Says

By MARY BRUCE
ABC News
Dec. 7, 2008


The president of the United Automobile Workers said this morning that he is "hopeful" Congress and the Bush administration will be able to pass a federal loan for Detroit's automakers this week.

If a rescue plan is not passed, Ron Gettelfinger, UAW president, said the collapse of one or more of the Big Three automakers may be unavoidable.

"We would not have been in Washington if we didn't need assistance in the industry. And I fear a collapse of General Motors and possibly Chrysler. And it could have a very negative impact on Ford," Gettelfinger said in an exclusive interview on "This Week With George Stephanopoulos."

While lawmakers work to finalize a $15 billion aid package for the auto companies, union leaders are set to appear before Congress this week to bolster the automakers' appeal. A vote on the plan is anticipated later this week.

However, if the auto industry does receive a lifeline from the government, it will likely only sustain the Big Three through the early part of next year, when President-elect Barack Obama takes office. When asked about Obama's comments this morning that all stakeholders, including labor, have to recognize that the industry still lacks a sustainable business model, Gettelfinger pointed to the many concessions that the union has made to the autoworkers in recent years.

"From the standpoint of the UAW... in '05, mid-contract, we went to first base; '07, we went to second base. Just this past week, we went to third base.

"Nobody else is even in the ballpark yet," Gettelfinger said. He also noted that "I agree with President-elect Obama that all the stakeholders do need to come to the table."

Gettelfinger also addressed concerns by members of Congress that union members' wages and benefits should be brought in line with those offered by overseas companies that have opened profitable operations in the U.S.

"I'm not sure exactly what we mean when we say bring wages in line... I think the men and women of the UAW, who have worked so hard to help these companies succeed, have made numerous concessions up to this point in time," Gettelfinger said. "And we should be given some recognition and some credit for that."

Responding to suggestions that Obama has not done enough to forge an agreement on Capitol Hill, Gettelfinger said "we're satisfied with the process."

"I respect the leadership in the Congress, and I know they're working very hard with the administration. President-elect Obama has made it clear that we can only have one president in power at a time. I'm sure he's keeping his hand on the pulse of what's going on here. And I'm sure that he is, behind the scenes, having some input," he said.

Gettelfinger urged all the stakeholders to come together and review any across the board "sacrifices" that can be made.

"We all have to get in the same room together," he said. "And I'm saying board members, management, suppliers, dealers, creditors and the equity holders -- get in there together, and then let's all make equal sacrifice."

dyrt
12-07-2008, 11:42 PM
"We all have to get in the same room together," he said. "And I'm saying board members, management, suppliers, dealers, creditors and the equity holders -- get in there together, and then let's all make equal sacrifice. That is exactly what happens in a bankruptcy. If they can agree without the stigma of an official filing then good.

It is the creditors that can force a bankruptcy whether UAW wants it or not. If the UAW is changing their tune then it is because the creditors are threatening.