The Big Three automakers in Detroit are begging Congress for a $25 billion government rescue, while the legislation clings to life support on Capitol Hill and top lawmakers and the White House suffer from bailout fatigue.
White House and GOP lawmakers say the beleaguered industry shouldn’t get any new funds, but Democratic congressional leaders want to tap the $700 billion Wall Street rescue package for new loans to U.S. auto manufacturers and suppliers..
GOP lawmakers and President George W. Bush instead propose diverting $25 billion in loans approved by Congress in September — designed to help auto manufacturers retool their factories so they can make more fuel-efficient vehicles — to cover the firms’ immediate financial woes.
Backed by leading Democrats, auto executives insist they need another $25 billion in emergency loans to avert a collapse of one or more of their companies before year’s end, which would bring the total federal help for the industry to $50 billion this year.
The head of the United Auto Workers union and the executives, were making their case Tuesday at a hearing before the Senate Banking Committee as auto bailout backers hunted the votes necessary to pass the plan in a postelection session. Lobbyists and aides in both parties tracking the plan privately acknowledge they are far short.
The debate comes as the financial situation for General Motors Corp., Ford Motor Co. and Chrysler LLC grows more precarious. GM has said it could run out of cash by year’s end without government aid.
“They’re going to need to address what is the perception among some of our colleagues here that there’s still some quality issues with the Big Three, and they haven’t begun to do the necessary restructuring — because they have,” said Sen. Carl M. Levin, D-Mich., an architect of the bailout.
At TicosLand.com and throughout Costa Rica and the rest of the world, we are waiting to see how the situation works out as far as the big three automakers are concerned. If the auto industry in the United States fails, we believe that it could send the rest of the world into an even deeper recession than the one we are experiencing.
Tags: chrysler, Costa Rica, ford, genearl motors, gm, government rescue
