Automakers Win Hearts in D.C., But No Cash (Yet)

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Susan Walsh / AP

Auto executives, from left, General Motors Chief Executive Officer Richard Wagoner, Chrysler Chief Executive Officer Robert Nardelli, Ford Chief Executive Officer Alan Mullay and UAW President Ron Gettelfinger, testify on Capitol Hill in Washington, Friday, Dec. 5, 2008.

And now they drive back to Detroit. The second money-begging pilgrimage to Washington by the CEOs of the three U.S.-based automakers went a lot better than their first vist two weeks ago. Then General Motors' Rick Wagoner, Ford's Alan Mulally and Chrysler's Ron Nardelli came in corporate jets and left with the angry words of lawmakers ringing in their ears. This time they traveled in hybrid cars, offered detailed plans for how they would spend and repay the $34 billion in government loans they requested, and met with a much friendlier reception. They still didn't leave with any money — although that could change next week. (Read TIME's biographies of the Big Three CEOs)

It wasn't that nobody wanted to give them any. The members of the Senate and House committees who interrogated the auto CEOs Thursday and Friday seemed mostly united in the conviction that something must done to avert the companies' collapse. The sticking points remain how, and with whose money.

Ever since the automakers first asked for a bailout last month, the Bush Administration has been urging that it come out of a $25 billion loan package Congress approved in September that the automakers were supposed to use to retool their assembly lines to build more fuel-efficient vehicles. Democratic Congressional leaders have wanted the cash to come instead from the $700 billion financial rescue pot they gave Treasury Secretary Hank Paulson in October — which is why the auto executives found themselves in the strange position of pleading their case before the House and Senate banking committees.

During Friday's House Financial Services Committee hearing, Michigan Republican Thaddeus McCotter proposed what he called a "Solomonic approach" — taking half the money from each pot. By Friday night, Democratic Congressional leaders were signaling that they were ready to cede ground and take all the funding from the $25 million loan program, on the assumption that they can replenish it later. But even if that flies, there remain a lot of big questions about how it would work.

In its restructuring proposal, GM called for the creation of a federal Oversight Board that would not only watch over the taxpayers' money but twist the arms of the company's creditors to get them to reduce their demands — essentially playing the role that a bankruptcy judge would if the company filed for Chapter 11. Almost everybody on Capitol Hill liked the idea, and the other two automakers endorsed it. But GM and Chrysler both say that because of plummeting auto sales they won't have enough cash to pay their bills by the beginning of next month, long before an effective oversight board could get up and running.

New York Democrat Chuck Schumer recommended that a single official — the Treasury Secretary, or someone else — be appointed to oversee the process. But nobody's volunteering for that job. Officials at Treasury and the Federal Reserve, already overburdened with the banking bailout, aren't interested. And the rest of the Bush administration seems to be running on autopilot for the final weeks of its existence.

This means the really big decisions about the automakers' future will have to wait until Barack Obama takes over in January. But again, GM and Chrysler don't have that much time, so discussion Friday turned to the possibility of a bridge loan to get them through until the end of March. Under questioning from Pennsylvania Democrat Paul Kanjorski, Wagoner said GM needed $10 billion to survive that long, and Nardelli said Chrysler would need $4 billion. Ford could make it that far without any help, Mulally said.

So that's what appears to be on the table: A $14 billion loan, from sources undecided, to be administered by parties unknown. Said House Financial Services Chairman Barney Frank after Friday's hearing, "We will now see whether we can put a bill together."

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