Automakers Head To House With Bailout Appeal
MICHELE NORRIS, host:
From NPR News, this is All Things Considered. I'm Michele Norris.
MELISSA BLOCK, host:
And I'm Melissa Block. It's deja vu all over again on Capitol Hill. Auto executives returned for a second day in their efforts to convince a bailout-weary Congress to ante up $34 billion. The CEOs are warning of disaster if the industry can't get financial aid from the government. As NPR's Debbie Elliott reports, there are a lot of ideas in Congress about what to do, but no consensus.
DEBBIE ELLIOTT: Today's sobering unemployment figures provided new context for the debate over whether to extend a lifeline to the domestic auto industry. Democratic Financial Services Committee chairman Barney Frank opened the hearing with a dire warning.
(Soundbite of congressional hearing, December 5, 2008)
Representative BARNEY FRANK (Democrat, Massachusetts; Chairman, House Financial Services Committee): For us to do nothing, to allow bankruptcies and failures in one, two or three of these companies in the midst of the worst credit crisis and the worst unemployment situation that we've had in 70 years would be a disaster.
ELLIOTT: Skeptics fear government loans won't be enough. Others wonder where Congress should draw the bailout line.
Representative JEB HENSARLING (Republican, Texas): Can you name me three industries in this economy that aren't hurting, that couldn't use $34 billion?
ELLIOTT: Texas Republican Jeb Hensarling.
Rep. HENSARLING: So, I wonder what the standard is. Is it simply because you're bigger or perhaps in more pain than other industries in the economy? That troubles me. If we say yes to you, who do we say no to?
ELLIOTT: Chrysler's Robert Nardelli tried to answer.
Mr. ROBERT NARDELLI (Chairman and CEO, Chrysler): In our case, there's about a million people depending on Chrysler's success. And so I'm certainly not justifying because we're bigger; I'm merely presenting the point that we may have a broader impact across the country, sir.
ELLIOTT: Lawmakers on the House panel have different ideas about the path out of the crisis. Illinois Republican Donald Manzullo thinks the solution is to create demand for American-made cars.
Representative DONALD MANZULLO (Republican, Illinois): We need to encourage Americans to start buying cars again and that is not in any of the plans. We should give Americans tax incentives, tax credits, to encourage them to buy cars.
ELLIOTT: Others suggested any emergency loan should require a merger of GM and Chrysler. The panel's ranking Republican, Spencer Bachus of Alabama, favors a bankruptcy reorganization paired with loans from the banks that have benefited from the $700 billion financial bailout.
Representative SPENCER BACHUS (Republican, Alabama): It is a solution not by Congress I'm proposing, but by the industry itself, but with the supporting role by the U.S. government.
ELLIOTT: As the ideas were bandied about, Pennsylvania Democrat Paul Kanjorski warned the Detroit CEOs that there's little time to fashion a congressional remedy.
Representative PAUL KANJORSKI (Democrat, Pennsylvania): This is not a time for us to horse around. What do we have to do? A very complicated agreement, too complicated to put together and get done before the end of this month. So, we're looking at the precipice. You're going to go over if we don't do something.
ELLIOTT: Kanjorski suggested a quick-fix bridge loan, giving GM and Chrysler enough to get them through until the spring, when the new president and Congress could grapple with their problem. After the hearing, Chairman Frank said it was important that Congress pass something that provides enough liquidity to keep the companies going until about March. Democratic leaders have implored the Bush administration to help automakers under the financial bailout. But President Bush today urged Congress to redirect money all ready appropriated for developing fuel-efficient cars. He said he was concerned about the viability of the auto companies.
(Soundbite of press conference, December 5, 2008)
President GEORGE W. BUSH: And likewise, I am concerned about taxpayer money being provided to those companies that may not survive.
ELLIOTT: Congressional leaders say they'll work through the weekend in hopes of having a proposal to consider next week. The Senate is set to return Monday afternoon. Debbie Elliott, NPR News, the Capitol.
NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR’s programming is the audio.