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Washington - GM, Ford, Chrysler Depart From Congress Empty-Handed |
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Democratic congressional leaders disagreed with Republicans and President George W. Bush's administration over how to provide $25 billion in aid to GM, Ford Motor Co. and Chrysler LLC. Only two days remain in a lame-duck session for lawmakers to resurrect a compromise.
Senate Majority Leader Harry Reid, a Nevada Democrat, suggested yesterday the situation was dire and refused to set aside time today to debate a compromise proposed by Senator Kit Bond, a Missouri Republican. Reid said Bond's plan hasn't been put in writing and the House of Representatives is about to adjourn.
``We have to face reality,'' he said. ``The reality is that we tried a number of different approaches.''
Bond and fellow Republican George Voinovich of Ohio insisted they weren't giving up on their proposal to speed up and broaden access to $25 billion already approved for fuel- efficient vehicle development that was a compromise.
``We've made great progress,'' Bond said. ``We are down to the point now where wording challenges are about the only remaining things to deal with.''
Plunging Shares
GM's German-traded shares fell 7.9 percent to the equivalent of $2.57 as of 11:09 a.m. in Frankfurt. GM has plunged 89 percent this year in New York trading. Ford shares rose 3.2 percent in Germany. The stock has declined 81 percent this year in the U.S.
A Democratic plan to help the automakers with funds from the recently approved $700 billion bank-rescue package stalled in the face of Republican opposition and a Bush veto threat. It may be revived next year after President-elect Barack Obama takes office in January and Democrats install a strengthened majority in both houses.
GM Chief Executive Officer Richard Wagoner said automakers would like action before Obama takes over because a global credit crunch that has slammed sales in the U.S. is spreading to global auto markets.
GM, the biggest U.S. automaker, said Nov. 7 it may run short of the $11 billion minimum cash it needs to pay its bills each month by the end of this year and will fall ``significantly'' short of that level by the middle of next year.
Cash Augmentation
The Detroit automaker burned through $6.9 billion in cash in the third quarter and had $16.2 billion on Sept. 30. Wagoner said yesterday he expects the automaker to slow its cash use to the $3.6 billion a quarter rate of the first half of this year.
``We're continuing to do everything we can to augment our cash position,'' Wagoner said in an interview yesterday after eight hours of testimony split between the U.S. House and Senate over two days.
``We've been stretched to do stuff that we thought was very difficult and painful to do already this year,'' he said. ``People are thinking every day of new ideas.''
Wagoner, Ford CEO Alan Mulally and Chrysler CEO Robert Nardelli left the Capitol after two days of appeals for help were rejected.
The companies are seeking aid as industry-wide sales have plummeted to a 17-year low. GM this month said it lost $4.2 billion in the third quarter and almost $73 billion since the end of 2004.
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Read Comments (10) — Post Yours »
1
Nov 20, 2008 at 08:08 AM Anonymous Says:
what do u think will happen if they go bankrupt NOTHING someone else will take it over as a new company & won't have all these debt & big retire benefits will sell their junky cars 2us a little cheaper so most americans will benefit but if we give them the billions they ask we ALL will loose (in past 10 yrs I had 4 brand new GM's and now a Honda its cheaper & better)
2
Nov 20, 2008 at 08:43 AM Anonymous Says:
“ what do u think will happen if they go bankrupt NOTHING someone else will take it over as a new company & won't have all these debt & big retire benefits will sell their junky cars 2us a little cheaper so most americans will benefit but if we give them the billions they ask we ALL will loose (in past 10 yrs I had 4 brand new GM's and now a Honda its cheaper & better) ”
Debt doesn't dissapear as we learned the hard way with the morgage crisis. The automobile companies owe the banks money, if they file for bankrupcy the banks eat the loss. That is really gonna help ease the credit crunch right?
If the banks keep losing money how are they going to pay back the tax payers the $700 billion they borrowed?
3
Nov 20, 2008 at 08:53 AM Anonymous Says:
Let them go bankrupt and reorganze, if we give them 25 BILLION they will COME BACK FOR MORE!!!!! its endless let them go bankrupt reorganize all their contracts with their emplyoees and try to save as much as they can, THEN you can come and ask the hard working taxpayers to bail you out!!
4
Nov 20, 2008 at 09:08 AM Sara Palin Says:
They didn't return emptyhanded they still have their private jets
5
Nov 20, 2008 at 09:23 AM Anonymous Says:
it is a hard to judge helping or not, other wise 3 million will go unemployed and will cost the gov. 25billion to support them and no tax income.
6
Nov 20, 2008 at 09:58 AM Anonymous Says:
“ They didn't return emptyhanded they still have their private jets ”
Have you ever heard of the guy that went to Atlantic-City in a $50,000 car and came home in a $200,000 bus?
7
Nov 20, 2008 at 11:20 AM Edsel Shmedsel Says:
Time to sell the 36 million $ plane and buy a $200,000 bus.
Maybe something of a higher quality that’s made in China.
Didn’t Chrysler go bankrupt once before?
Did they pay all their debts at the time or were companies
forced to write off money they were owed?
8
Nov 20, 2008 at 11:53 AM Anonymous Says:
“ Debt doesn't dissapear as we learned the hard way with the morgage crisis. The automobile companies owe the banks money, if they file for bankrupcy the banks eat the loss. That is really gonna help ease the credit crunch right?
If the banks keep losing money how are they going to pay back the tax payers the $700 billion they borrowed? ”
The debts to the bank won't disappear, but the pension obligations the unions choked down the automakers throat, WILL disappear.
The unions have destroyed the automakers and are trying to destroy Agri-Rubashkin too.
9
Nov 20, 2008 at 11:47 AM Anonymous Says:
“ Time to sell the 36 million $ plane and buy a $200,000 bus.
Maybe something of a higher quality that’s made in China.
Didn’t Chrysler go bankrupt once before?
Did they pay all their debts at the time or were companies
forced to write off money they were owed? ”
Chrysler did not go bankrupt. They were bought out by a private fund.
10
Nov 20, 2008 at 11:46 AM "Every dollar the government gives to someone has to be taken away from someone else" Says:
Look at it this way...
When you buy a car from the big 3, you are paying about $2000 extra for people who are not working anymore. When you buy a Honda, Toyota, etc., (I'm talking about cars made here in the USA), you dont pay that.
When you buy a car from the big 3, you are paying extra money for the honor of having a UAW or other union put your car together. When you buy other brands, you dont pay for this.
If they go chap 11 they will have to rework the union contract to something that makes more sense. Or nuch besser, get rid of the evil unions once and for all.