WASHINGTON — Democratic Congressional leaders on Thursday said that the executives of America’s foundering automakers had failed miserably in persuading Congress or the public that $25 billion in aid from the government would be well spent and they gave industry leaders 12 days to come back with plans showing otherwise. þþThe House speaker, Nancy Pelosi of California, and the Senate majority leader, Harry Reid of Nevada, said at a joint news conference that any legislative proposal put to a vote this week would have failed, and they leveled scathing criticism at the executives that included pointed barbs for flying to Washington this week on private jets. þþThe comments indicated that after two days of hearings, the auto executives had hurt rather than helped their cause. Lawmakers who just days ago were calling loudly for $25 billion in aid from the Treasury’s $700 billion bailout instead said that they were now unconvinced that taxpayer money could save the industry from disaster. þþ“It’s all about accountability and viability,” Ms. Pelosi said. “Until we can see a plan where the auto industry is held accountable and a plan for viability on how they go into the future — until we see the plan, until they show us the plan, we cannot show them the money.” þþMs. Pelosi and Mr. Reid called their news conference to pre-empt a bipartisan plan offered by senators from the states with big stakes in the auto industry, including Senator Christopher S. Bond, Republican of Missouri, and Senator Carl Levin, Democrat of Michigan. Those senators proposed speeding up access to $25 billion in loans for the automakers that have already been approved by Congress by easing restrictions on that money.þþThe Congressional leaders said the Bond-Levin plan could not win passage this week. Instead, they said, the House and Senate will hold hearings the week of Dec. 2 to consider plans put forward by the industry. þþIf the plans pass muster, they said that they were prepared to call Congress back in session to consider legislation the following week. The hearings will be run by Barney Frank, Democrat of Massachusetts and chairman of the House Financial Services Committee, and Senator Christopher J. Dodd, Democrat of Connecticut, the chairman of the banking committee. þþ“Unfortunately, the sad reality is that no one has come up with a plan that can pass the House and the Senate and be signed by President Bush,” Mr. Reid said. “The executives of the auto companies have not been able to convince Congress or the American people that this government bailout will be its last.” þþMr. Reid insisted that the Bush administration had the legal authority to aid the auto industry without new legislative action. But the Bush White House has resisted calls to use money from the $700 billion Troubled Asset Relief Program to help Detroit, and there was no indication that the administration’s position would change in the days ahead. þþThe White House press secretary, Dana M. Perino, said that the administration would support the proposal on the loan money. þþ“The president has insisted that help for the auto industry be contingent on the industry making the changes needed to be viable,” Ms. Perino said. þþThe Bond-Levin proposal meets that test, she said, adding, “Their plan provides assistance from already-appropriated funds, and has strong taxpayer protections.þþAt their news conference, the Congressional leaders showed little sympathy for the auto executives. þþ“What happened here in Washington this week has not been good for the auto industry,” Mr. Reid said. “I know it wasn’t planned but these guys flying in their big corporate jets doesn’t send a good message to people in Searchlight, Nev., or Las Vegas, or Reno, or anyplace in this country. We want them to get their act together. We want them to come up with something. We’re here to help. We’re not against the auto industry. We want to help those people keep those jobs.” þþEven Senator Bond took a shot at the executives while putting forth the loan proposal. “There are a lot of steps that the auto industry is going to have to take,” Mr. Bond said. “One would suggest that selling corporate jets might be one, but that’s just a suggestion.” þþThe bipartisan proposal was announced by Mr. Bond, Senators Carl Levin and Debbie Stabenow, Democrats of Michigan; Senator George V. Voinovich, Republican of Ohio; Senator Sherrod Brown, Democrat of Ohio; and Senator Arlen Specter, Republican of Pennsylvania. Their proposal would speed up access to the $25 billion in federally subsidized loans already approved, under a new program to be administered by the Commerce Department rather than the Energy Department, which has authority under the existing law. þþThe loan subsidies were authorized in a 2007 energy bill that requires the money to be used for retooling plants for the production of advanced fuel-efficient vehicles and some Democrats, including Ms. Pelosi, have insisted that those requirements should not be loosened. Instead, they have called for a separate aid package for Detroit. þþMs. Pelosi scolded the auto executives for lacking a coherent strategy. She said the executives first came to Congress seeking support for a potential merger between General Motors and Chrysler. But later they came back requesting a cash infusion for basic operations instead.þþFord, which is widely regarded as the strongest of Detroit’s Big Three, and G.M., which is considered the weakest, quickly issued statements saying they would be happy to present plans to Congress for their future survival. þþRon Gettelfinger, the president of the United Automobile Workers union, urged the government to save the industry. “Inaction is simply not an option,” he said. “Without immediate action, we’ll see a collapse of one or more of these companies by the end of this year.”þþMr. Gettelfinger said he hoped for assistance that would keep the automakers afloat at least until President-elect Barack Obama’s inauguration on Jan. 20. þþG.M. Unit Seeks Treasury CashþþGMAC Financial Services, the financing arm of General Motors, said Thursday that it had applied to the Federal Reserve to become a bank holding company to become eligible for aid under the Treasury’s $700 billion bank rescue plan.þþThe company said the change would shore up its capital and allow it to keep providing automotive and mortgage financing.þþGMAC is majority owned by the private equity firm Cerberus. G.M., which is running out of cash, owns a 49 percent stake.þþGMAC is also starting cash tender offers to buy or swap debt held by its units and its mortgage business, Residential Capital, for cash, new notes or preferred stock in a move to bolster capital levels and reduce debt.þþNick Bunkley and Bill Vlasic contributed reporting from Detroit, and Leslie Wayne from New York.þþ
Source: NY Times
