GM CEO Rick Wagoner, Ford CEO Alan Mulally, Chrysler CEO Bob Nardelli, and UAW President Ron Gettelfinger appealed to Congress this week for $25 billion in aid from the Treasury to help the floundering automakers recover. After the hearing, comments from Congress indicated that the executives had hurt their case rather than helped it.
Congress said the automakers needed to show plans to become viable again if they were to receive the money, yet no executive was able to fully explain how they planned to do so (seeing each CEO fly in on different corporate jets also didn’t help their case).
Senator Christopher S. Bond, Republican from Missouri, and Senator Carl Levin, Democrat from Michigan, were seeking to speed up access to the loans already approved by lessening the restrictions on it. After this hearing though, House Speaker Nancy Pelosi said even that proposal would not have passed.
“It’s all about accountability and viability,” she said following the hearings. “Until they show us the plan, we cannot show them the money.” Automakers have until December 2 to do just that, and GM, Ford, and Chrysler have since indicated they’d be more than happy to present business proposals.
Legislators will return to Congress for the next hearing on December 2, and there could be a vote on the measure as early as December 8. Even if the loan passes, Congress will likely insist on multiple conditions on any of the loans, including the government sharing in any future profit witnessed by an automaker. Still, those provisions aren’t enough for some politicians, including Senator Chris Dodd, a Democrat from Connecticut.
“The industry submitting a plan is not going to be enough to me,” he said yesterday. “I’m going to be very involved in talking to people about what ought to be a part of a plan.”
Let’s hope this vote isn’t too late for GM and Chrysler, which have said they could run out of cash before the end of the year. If either GM or Chrysler does go down, Ford said it too could also falter, as suppliers depend on all three for business.
After the hearings, Gettelfinger also started his ‘business plan’ to show Congress. He started negotiations giving more UAW concessions in order to cut costs and help revive the bailout plan. Part of the deal would be to dismantle the UAW jobs bank which pays laid-off workers, sometimes for years.