Automakers Present Final Plea
MADELEINE BRAND, host:
From the studios of NPR West, this is Day to Day. I'm Madeleine Brand.
ALEX COHEN, host:
And I'm Alex Cohen. Coming up, discussion of a government bailout for the Big Three auto industry has our listeners in an uproar.
BRAND: That discussion is taking place today in the Senate Banking Committee. The leaders of the Detroit automakers are testifying. Two weeks ago, politicians ripped them for arriving in private jets and failing to explain how they would fix their companies. This time, they've all submitted plans for survival and are looking contrite after arriving in Washington by hybrid car.
NPR's Frank Langfitt has been following the hearing. He's here now. And, Frank, what are the executives saying today and how does it contrast with the hearing two weeks ago?
FRANK LANGFITT: Well, they say they're going to make some tough decisions to fix these companies, and one of the things they did is they were admitting responsibility for some of the problems in the past, which we didn't hear as much of a few weeks ago. Rick Wagoner, he's the CEO of GM, he started off with this admission.
Mr. RICK WAGONER (CEO, General Motors): We're here today because we made mistakes, which we are learning from, because some forces beyond our control have pushed us to the brink, and most importantly, because saving General Motors and all this company represents is a job worth doing.
BRAND: Rick Wagoner, the CEO of GM. Frank, that sounds like a really different tone than the one he took a few weeks ago.
LANGFITT: It really is, and I think what happened a few weeks ago is, they got shellacked. I mean, not just by the politicians, but also by the public. And I think there was a big fear that they wouldn't get this money. Also, the auto sales, they're even worse now. Sales just came out for November yesterday. All the companies are down, including Toyota, Nissan.
GM also now needs this money even more than it did before. They say now they need about $4 billion this month and up to another four billion in January. And, you know, a few weeks ago, the total price of this bailout for all these three companies was about $25 billion. Now, all together, they're asking for up to $34 billion.
BRAND: So, if Congress does agree and gives them the 34 billion, what will they get in return? What do the executives say they'll do to make the companies profitable again?
LANGFITT: Well, GM in particular, let's take them first. They're talking about some pretty sizable changes here. They're talking about cutting another 31,000 jobs. That's on top of a lot of other cuts they've done in the last few years. They're also talking about closing up to nine plants. They're going to sell Saab, phase out much of Pontiac.
They're also talking to Saturn dealers about what they call, quote, "an alternative." But it's not clear exactly what that means. Are they going to close Saturn? Are they going to try to sell it? I'm not quite sure.
BRAND: OK, so that's GM. Ford is actually in the strongest position of the three companies and says it can survive. It has a lot more money on hand. What is its plan going forward?
LANGFITT: Well, CEO Alan Mulally from Ford, he said they'd like a $9 billion line of credit, but they may not even have to tap it. And that's a big contrast to GM and Chrysler. Chrysler, for instance, they're asking for seven billion this month. Ford says what they've done is, they've already made a lot of the tough decisions. They sold Jaguar, Aston Martin, and Land Rover. And like a lot of other CEOs, Mulally today struck a contrite tone and talked about some of the mistakes that his company had made.
Mr. ALAN MULALLY (CEO, Ford Motor Company): We produced more vehicles than our customers wanted and then slashed prices, hurting the residual values of those vehicles and hurting our customers. Now, we are aggressively matching production to meet the true customer demand.
BRAND: So, Frank, the CEOs do sound a lot different this time around. What about the senators themselves? Are they a little more forgiving?
LANGFITT: Definitely a warmer tone from the senators and more supportive. Take Christopher Dodd, for example. He's the chairman of the Senate committee, Democrat from Connecticut. A few weeks ago, he raked these guys over the coals. He said a lot of their wounds were self-inflicted. This time, this morning, he said he supported the loans to the companies, and he praised them for coming back with specific plans. Here's how he put it.
Senator CHRISTOPHER DODD (Democrat, Connecticut): Some of the companies ought to be commended for going back to the drawing board, making tough decisions, and stepping forward today. You've come a long way in two weeks, I would say.
BRAND: OK, so that's Christopher Dodd in support of a bailout. But other senators, they're still skeptical, right?
LANGFITT: Absolutely. There's still a lot of opposition out there. If you were listening to some of the questions this morning, people were still asking, you know, can this be done in bankruptcy instead of through this political process that we're seeing on Capitol Hill?
BRAND: So it's unclear whether it will go forward, the bailout?
LANGFITT: We're going to have to see. They're going to go - tomorrow, they will take their case to the House committee. Then, if it looks like there's enough votes, I think Congress could come back for a lame-duck session next week to consider this.
BRAND: Thanks, Frank.
LANGFITT: Happy to do it, Madeleine.
BRAND: That's NPR's Frank Langfitt covering the hearing today on Capitol Hill.