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Show us a plan, Congress tells automakers

Posted by Foon Rhee, deputy national political editor November 20, 2008 02:20 PM

Unable to reach a deal on how to help the ailing auto industry, congressional leaders announced this afternoon they'll try again in a second lame-duck session the week of Dec. 8 -- if auto executives come up with a plan.

"Unless they can show us a plan, we can't show them the money," said House Speaker Nancy Pelosi.

Senate Majority Leader Harry Reid urged the Big Three automakers to submit a proposal by Dec. 2 to Senator Chris Dodd of Connecticut and Representative Barney Frank of Massachusetts, who could then hold hearings on the plan before another session.

Reid said it gives automakers "another opportunity to make their case" to Congress and the American people.

He said while lawmakers "worked hard to fashion a bipartisan consensus" this week, the "sad reality" is that no one has come up with a plan that can pass Congress and be signed by President Bush.

Frank said without a plan that specifies how the money would be used and how it would help the industry restructure, he could imagine the headlines of Congress throwing more taxpayer money at a problem with a "barely examined" bill that was akin to leaping "into the abyss."

"It has to be done in a careful way," Frank said.

Dodd said he'd be happy to hold hearings.

The top executives of Chrysler, Ford, and GM spent Tuesday and Wednesday on Capitol Hill, pleading for $25 billion in loans that they argued would provide a "bridge" through the credit crunch until they could start recovering.

But many senators questioned whether the money would be enough and criticized the industry for not moving quickly enough to fuel-efficient vehicles. And some say bankruptcy would be good for the companies, allowing them to get out from under costly labor deals.

In September, Congress approved a $25 billion package to help automakers retool to make more hybrids and energy-efficient vehicles. Some senators wanted to let the auto companies dip into that money, no strings attached.

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Detriot and co planted their swords long ago with their anti-public transport lobbyists, refusal to invest in alternative energy, strident opposition of new fuel efficiency standards and general short-sightedness about changing consumer attitudes, (sorry, changing a color and name of a vehicle : lipstick on a pig).

As said, they planted their swords, time to fall on them.

Posted by ThankfulWe'reaSmarterCountrynow November 20, 08 02:40 PM
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Reality is that the $25 billion is really just to pay the contractual costs of reducing personnel. The big 3 have such burdensome contractual obligations through the unions that they can't even afford to downsize in order to cut costs. We would probably be better off having a bankruptcy court rewrite those contracts and restructure the companies. Bankruptcy can save GM and Ford, but at their current burn rates $25 billion is gone in a year and the companies still won't be profitable. Ford is salvagable, but GM should just be split up and sold off along its car company lines... Saturn and Cadillac could be salvaged, maybe a couple other lines. Since Chrysler went private it is hard to say where they are headed.

Posted by Pat November 20, 08 02:53 PM
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No one wants to the Big Three fail, but let's be reasonable, they have done whatever they wanted for ever and it has come back to bite them in the butt. The unwillingness to pursue electric or hybrid cars has left our boys scurrying. Perhaps now Detroit will tell the oil companies "good bye"

Posted by Ed November 20, 08 03:02 PM
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The sad reality of all this is that we have to bailout an industry that continues to make poor choices and bad decisions with its own business practices. However, do we risk almost 2 million people either losing their jobs or being effected by this because the government does absolutely nothing? Let's see what these idiots come with during the holiday break. I'm willing to bet that it will be more of the same which will only delay the inevitable.....The American auto industry will more than likely have to consolidate and merge with one another or end up out of business all together. This includes retooling its factories and not building cars that cost over 100k that can only get 8mpg. It's about time these guys got a clue. Let's just hope Congress doesn't wimp out on this and holds these companies accountable for what they've done to that region and this entire country!

Posted by ATR November 20, 08 03:12 PM
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I had a small folk art painting company that went under...Can you please send me a bailout. $500K would make me happy...Cash no check!

Posted by E Marie Noonan November 20, 08 03:14 PM
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Perhaps part of that plan will involve selling their fleets of private jets - which they used to fly to the hearings at 20K a pop. GM has 8 including one valued at $36M. Thanks Brian Ross for the great reporting at ABC! Time to throw these out of touch losers out on the street and get some real managers who have a clue about running a competitive business.

Posted by Dav November 20, 08 03:23 PM
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Personally, I would rather bail out E Marie Noonan's folk art painting company than bail out this country's auto industry. I think that Ms. Noonan would use her $500K in a more thoughtful and efficient way than the Big ( or is that shrinking ) 3.

The only ads I see from this country's auto (should be called truck/SUV) industry are for the heavy trucks and SUVs. When they start advertising, oh, I suppose they have to make them first, economical, fuel-efficient cars, I may pay attention to their cries.

Posted by Jet November 20, 08 03:38 PM
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Another Globe "Name that Party" article -

DEMOCRATIC congressional leaders announced this afternoon.......

Posted by Tony November 20, 08 03:56 PM
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Congress and the Senate know very well the majority of the intelligent American people do not want this bailout given without a major restructuring. The US Auto is a money pit in need of a major overhaul that only bankruptcy can impose. Bankruptcy doesn't mean lost jobs it means restructuring to become profitable again. Let the Bankruptcy Court take down the UAW!

Posted by Vincent Finn November 20, 08 04:08 PM
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Controlled Bankruptcy!!!!! Mitt has it right! "Change we can believe in"!

Posted by Bill November 20, 08 04:11 PM
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Too many models of cars and labor rates too high for the public to afford your products. Remember Henry Ford and the mass production idea to cut costs. Make more fuel efficient affordable cars and the public will crowd your showrooms. You have priced yourself out of business. Also noticed you are paying more for health care than you are paying to build cars. Correct your problems.

Posted by Carroll November 20, 08 04:13 PM
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The democrats are worried about a plan. Where were they when Bush drove us into Iraq-there was no plan and the dems did not bother to ask for one.
Give it to Detroit because if you don't the population of Chicago or LA (sans suburbs seeking a downtown) will be out of work nationwide. Really, dems and repubnants, it's only the cost of 2.5 mos in Iraq.

SHARE THE WEALTH!!!!!!!!!!!!!!

Posted by NC MAGNOLIA November 20, 08 04:19 PM
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Let them fail. Let the foreign car manufacturers buy them out and run them. They are a helluva lot better at making cars than those idiots!. And they know what kind of cars we want and listen to us. These antique jokers are flying around in private jets while the company goes under!!!? I remember the 70's and the Big Auto giants doing absolutely nothing to assist middle America with their needs way back then. They've had 40 years to get it right and they have FAILED miserably. NO BAIL-OUT!!!!

Posted by Willard November 20, 08 04:46 PM
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Should the American taxpayers pay $110k per employee at GM to get them take a hike? I don't think so. If they want the money then the gov't should get the company.

Posted by NHViewpoint November 20, 08 05:47 PM
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First every executive in the auto industry needs to renounce in writing any golden parachute. Then the executive salaries need to be cut back to a reasonable level. Then the jet fleets need to go.

Posted by kozynferg November 20, 08 06:17 PM
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Let me get this straight, the automakers submit a plan to Frank and Dodd? Are you kidding me, these guys have no business sense what-so-ever. Frank is guilty of causing the sub-prime crisis which got us in this mess and Dodd took a sweetheart loan from Countrywide on his primary residence. If there is a plan to be submit, let it be submitted to individuals with an ounce of credibility and professional responsibility.

Posted by Concerned Voter From MA November 20, 08 06:19 PM
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There is absolutely no reaslon to reward bad corporate behavior and results with a bailout. They hold the public hostage when they talk in a fearmongering way. Let them go bust. Like the aftermath of a natural disaster their will be a natural rebirth. The corporate leadership who have become our Royalty have screwed up so badlly that they should be at work managing a car wash in Clebeland (with my apologies to Cleveland!)

Posted by Eric November 20, 08 06:52 PM
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You want capitalism? You got it. This is capitalism at its finest. If you allow your company to be pulled around be a money grubbing union like UAW, that's what happens. Funny how the auto companies in America not associated with UAW are doing just fine.

Excuse me for not wanting a bailout that will only delay the inevitable for six months so the execs can fly around in their private jets and their employees can get paid to sit at home.

Posted by Vandelay November 20, 08 07:02 PM
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Don't worry UAW - "present" Obama is on his way to bail out you and everyone else who supported his campaign.

Change you can believe in.

Posted by NoNoNobama November 20, 08 07:10 PM
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If there's a fire water it down rather than pouring more fuel to it.It can rebuild properly with the new plan.

Posted by skmj November 20, 08 07:12 PM
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1) UAW needs to give concessions to preserve the industry that employs them.
2) The Big Three CEO's need to create an overall industry plan to revamp the american auto industry and satisfy Congress in order to receive the $$ help.

Problem solved, American auto industry saved. Get to work.

Posted by irishdan2001 November 20, 08 07:31 PM
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Submit a proposal to Barney Frank.... ugh.

I cannot believe that idiot is so influential in this mess. We are really doomed.

Auto industry is going to fail and it's really going to ripple through the economy.

But, what's the alternative really.? We are coming out of this a two class economy, rich and poor. I hope I can stay in the rich side.

Posted by Mikey Boy November 20, 08 09:31 PM
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Even though I work in Sales at a GM dealership, and am directly affected by the slowdown in sales, I believe the best thing that could happen to all the so called "Big 3" would be for them to declare themselves bankrupt.
They need to begin listening to their customers, and asking their Sales Staff what their customers are telling them, re-organize, get out from under these punitive Union Contracts, tell their fat cat retirees to go get a job because the gravy train was derailed, and concentrate on building the vehicles the public wants.
As well, they should have one van, one or two trucks, and a few cars, and not give each division their own cloned version of every vehicle.

Posted by William November 21, 08 05:28 PM
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