Automakers' pleas unanswered

Chances for deal called 'remote'

UAW president Ron Gettelfinger (left) and GM chief Richard Wagoner yesterday in front of the House financial services panel. (Kevin Lamarque/Reuters)

WASHINGTON - Detroit automakers were poised to leave Washington yesterday without the $25 billion in federal aid the companies contend is critical to their long-term survival.

After two days of testimony, the chief executives of General Motors Corp., Ford Motor Co., and Chrysler LLC were unable to persuade lawmakers to aid their industry by tapping the $700 billion financial rescue program.

A last-ditch attempt was being made by senators from automotive states to change the terms of a $25 billion loan program targeted to improving fuel efficiency. But after two days of dramatic hearings, the possibility that Detroit's carmakers will get immediate financial help from the government appeared slim.

Senator Christopher J. Dodd, a Connecticut Democrat, the chairman of the banking committee, was quoted by the Associated Press as saying that the chances of reaching an agreement were "remote."

"I don't see how in the next few days this is going to move forward," Dodd said, according to the AP. Still, he added, "That does not mean that there are not opportunities." He suggested that the Federal Reserve could possibly step up to the job.

Earlier, the chief executives of the three Detroit automakers - Robert L. Nardelli of Chrysler, Alan R. Mulally of Ford, and Rick Wagoner of GM - were back on Capitol Hill, appealing this time to the House of Representatives to approve $25 billion in bailout funds to stave off industry collapse.

Much like senators at Tuesday's hearing, who mostly reacted with skepticism and criticism of the industry's grave management problems and ability to reform, many House lawmakers expressed concern that America's taxpayers - some of whom make less than the average auto worker - would be sacrificing when the industry was not.

"A bailout is not a solution to the fundamental problems of the Big Three automakers," said Representative Spencer T. Bachus III, Republican of Alabama. "A bailout of the auto industry will just push the problem further down the path."

Representative Michael E. Capuano, a Massachusetts Democrat, told the executives that it all came down to trust.

"My constituents do not trust you," Capuano said, and need some assurances that "you're not just going to blow this again."

The chairman of the House Committee on Financial Services, Representative Barney Frank, Democrat from Massachusetts, cautioned against a double standard of aiding the white-collar financial industry and not a blue-collar one in the bailout.

Former Massachusetts governor Mitt Romney took a harsh stance yesterday when he said in a New York Times oped piece that "if General Motors, Ford, and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye."

Romney, a Michigan native and the son of former Michigan governor and American Motors Corp. president George Romney, wrote that a managed bankruptcy may be the only path to the fundamental restructuring the industry needs.

"It would permit the companies to shed excess labor, pension, and real estate costs," he wrote, adding "the federal government should provide guarantees for postbankruptcy financing and assure car buyers that their warranties are not at risk."