WASHINGTON — The head of the Senate Banking Committee said on Thursday that the Big Three automakers had convinced him that they deserved federal aid, but another prominent member of the panel remained steadfast in his opposition.þþ“Not perfect by any means,” Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the committee, said of the Big Three’s detailed plans to turn their companies around. Nevertheless, Mr. Dodd said, the companies had demonstrated “a commitment to that kind of necessary reform” needed to keep American carmakers viable in the 21st century.þþBut the committee’s top Republican, Senator Richard C. Shelby of Alabama, said Detroit had failed to show that it could reverse a decades-long slide. “I intend to oppose bailing out the Big Three,” Mr. Shelby said at the outset.þþNot only had the auto executives failed to make a better case than they did at their first appearance on Capitol Hill two weeks ago, but new questions have arisen, Mr. Shelby said. In particular, he said, the companies had raised their request for federal aid to $34 billion from $25 billion.þþ“How are you going to pay it back?” Mr. Shelby asked.þþMr. Dodd and Mr. Shelby agreed on one thing: that the original $700 billion rescue plan approved weeks ago for banks and investment companies was being run haphazardly in Washington, and had failed to move lenders to open up the flow of credit, as it was intended.þþ“Still waiting, still waiting,” Mr. Dodd said in exasperation, arguing that if the government could make $700 billion available for the financial sector of the economy, it ought to be able to find a much smaller sum for Detroit, especially since not doing so would endanger “tens, if not hundreds of thousands of jobs.”þþThe chief executives of the Detroit automakers were back on Capitol Hill on Thursday for the legislative equivalent of a mulligan.þþTwo weeks ago, the executives — Alan R. Mulally of Ford, Rick Wagoner of General Motors and Robert L. Nardelli of Chrysler — asked Congress for $25 billion in loan guarantees but left Washington empty-handed after skeptical lawmakers refused to approve federal aid until they heard detailed plans on how the companies could be viable .þþ“It’s fair to say that last month’s hearings were difficult for us,” Mr. Wagoner said Thursday in prepared remarks. “But we learned a lot.”þþThis time, the executives will be seeking more money — $34 billion — and are expected to alter their approach. Instead of telling lawmakers about the fallout to the economy if the carmakers are allowed to collapse, the executives are expected to talk about building fuel-efficient cars and long-term strategies. þþ“Our plan dramatically accelerates and expands the restructuring that we’ve been driving in North America for the past several years,” Mr. Wagoner said. “It’s a blueprint for creating a new General Motors. ... One that is lean, profitable, self-sustaining and fully committed to product excellence and technology leadership, especially in alternative compulsion.”þþIn its plan to Congress, G.M. said it would significantly reduce jobs, factories, brands and executive compensation in a broad effort to become more competitive with American plants operated by Toyota, Honda and other foreign auto companies.þþThe plan also called for increased production of hybrid, flex-fuel and other fuel-efficient vehicles, and “an increased commitment to energy-efficient technologies.”þþ“Ford is committed to building a sustainable future for the benefit of all Americans,” Mr. Mulally said, “and we believe Ford is on the right path to achieve this vision.þþFor G.M. and the other carmakers, the shift in tone came after a severe dressing down after the last hearings, when the failed to persuade lawmakers that they needed.þþTwo companies, G.M. and Chrysler, saying they need immediate help to avoid collapse. þþG.M. and Chrysler have both said they are dangerously close to running out of cash to run their operations by the end of the year. Ford is somewhat healthier, but is also seeking government loans.þþThe three executives, along with the head of the United Auto Workers union, Ron Gettelfinger, will also appear at a hearing on Friday in the House.þþThe U.A.W. on Wednesday agreed to suspend its jobs bank, in which idled workers continued to be paid, and to delay financing for retiree health care. In addition, the union said it would be willing to modify its current contract.þþDemocratic Congressional leaders have said that they want to help the automakers and that they were heartened by the gesture of contrition that the executives made by driving to Washington — rather than flying on corporate jets, as they did two weeks ago — and by the more comprehensive plans submitted by the companies. þþBut the political climate on Capitol Hill is still doubtful for the automakers, and only seemed to worsen on Wednesday with a new CNN poll showing a majority of Americans opposing a taxpayer rescue.þþAs a result, there is growing concern among the Democratic leadership that they will simply not be able to drum up enough votes to pass an aid package next week, and that to do so will require a major lobbying effort by President Bush and President-elect Barack Obama. þþ“We don’t have a good sense from our members that this is something they want to do,” a senior House Democratic aide said. “It’s going to take Bush and Obama calling people.” þþMany conservative Republicans remain staunchly opposed to any further corporate bailouts by the government, and some are openly calling for Congress to let one or more of the automakers go into bankruptcy. þþ“Not only should bankruptcy be an option for domestic automakers, but it is considered by most experts to be the best option,” Representative Jeff Flake, Republican of Arizona, said in a statement on Wednesday. þþMany lawmakers are reluctant to approve another large expenditure of taxpayer money to prop up private corporations, especially given the mounting criticism of the Treasury’s $700 billion stabilization program for the financial system. þþOn Wednesday, the Senate majority leader, Harry Reid, said there did not seem to be enough support in Congress to use that fund to help the auto companies. “I just don’t think we have the votes to do that now,” he told The Associated Press.þþBill Vlasic contributed reporting from Washington and Nick Bunkley from Detroit.þþ
Source: NY Times
