Detroit's Big Three automakers — General Motors, Ford and Chrysler — are seeking a piece of the $700 billion financial industry bailout for emergency loans, but the proposal faces hurdles in Congress.
While some blame the companies for their own problems, others warn that bankruptcy in the industry would deepen the nation's economic woes.
United Auto Workers President Ron Gettelfinger, who testifies before Congress this week, tells Steve Inskeep that bankruptcy is not a viable option for the industry.
"We've been through enough of these bankruptcies that I can tell you, that is the worst possible path for this industry to go in," Gettelfinger says. Filing for Chapter 11 protection "would lead to Chapter 7, which is liquidation," he says. "I firmly believe that."
Gettelfinger says a big part of the industry's problem is that consumers can't get loans for new vehicles.
In October 2007, General Motors' stock was over $42 a share. Since then, GM stock has dropped as low as the single digits. "We had made a transformational agreement with that company, and they were on the road to success. Now, since December, we've lost 1.2 million jobs in this country. Then, if we pile on that, that we saw the housing market collapse, we saw Wall Street in the tank, the credit market is so tight out there — this industry got caught up in that."
The industry went from doing well a year ago to being in the tank today, Gettelfinger says, "because consumers cannot get loans. I think it's imperative that the government issue this low-interest bridge loan to help us through this economic downturn."
Critics of the industry blame management of the Big Three automakers for the industry's woes, as well as complicated deals with the union.
But Gettelfinger says it's unfair to place blame solely on management, and he isn't asking for a shake-up. He dismisses criticisms that the UAW agreements have too many rules, saying the deals were "filled with concessions."
"Workers at the UAW, both active and retired, have stepped up to the plate time and time again to help our industry. ... Look at the quality improvements that have been made over the years. ... Today, the vehicles that are on the road that are assembled by the UAW members at the Big Three are second to none," he says.