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Bailout compromise blocked, but hope remains

Rob

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Bailout compromise blocked, but hope remains

Pelosi: 'Until they show us a plan, we can't show them the money'

Harry Stoffer
Automotive News
November 20, 2008 - 12:48 pm ET
UPDATED: 11/20/08 4:30 p.m. EST

WASHINGTON -- Democratic leaders of Congress today blocked action on legislation that would provide $25 billion in emergency federal loans to the Detroit 3.

Instead, the leaders directed General Motors, Ford Motor Co. and Chrysler LLC to submit plans showing how they would use the aid. They scheduled hearings on the plans for the week of Dec. 2, and said Congress would return Dec. 8 to consider aid measures.

The announcement upstaged moves by a bipartisan group of senators to get action this week on a compromise that would redirect $25 billion in funds already approved to help automakers build more fuel-efficient vehicles. Instead, they would let the Detroit 3 use the money to bridge their cash crises, but with extensive conditions.

Sens. Carl Levin and Debbie Stabenow, both Michigan Democrats, scheduled an afternoon news conference with Republicans from automaking states to discuss the compromise.

But before they arrived at a Capitol studio, House Speaker Nancy Pelosi, D-Calif., Senate Majority Leader Harry Reid, D-Nev., and seven other Democratic leaders entered the room and announced their decision to demand viability plans from the Detroit 3 and hold more hearings.

"It's their agreement," Reid said of the compromise's supporters.

Added House Speaker Nancy Pelosi, D-Calif.: "Until they show us a plan, we can't show them the money."

Pleased by bipartisan effort

But during their news conference, Levin and other lawmakers said they were pleased with the compromise and hoped it could form the basis of a deal in December. They said they were disappointed by the decision by the Democratic leaders to postpone action for at least two weeks.

"There's risks in this delay" for the teetering companies, Levin said.

Under his bill, the Commerce Department would consider the Detroit 3 viability plans. Under the leaders' plan, the review would be Congress' job.

"That's taking on a huge responsibility," Levin said.

Stabenow said she is encouraged that the leaders acknowledged the critical importance of the auto industry and "are not shutting the door" to aid.

Sen. George Voinovich, R-Ohio, said millions of Americans who depend on the industry are worried about their livelihoods. A vote on the compromise "would have been a wonderful Thanksgiving present" for them, he said.

Voinovich complained that the Democratic leaders have established no criteria for the plans automakers are to submit to Congress.

Automakers react

In a statement, Ford Motor Co. said it would forward a plan to lawmakers.

"Ford welcomes the opportunity to provide our plan to Congress," the statement said. "We have a great plan that will continue Ford's transformation into a lean, profitable company that delivers the safe, fuel-efficient, high-quality new products that our customers want and value."

In a separate statement, GM said it would "deliver a plan to Congress that shows them a viable General Motors. We agree completely that there must be accountability to U.S. taxpayers for government support that enables automakers to continue their restructuring and to ensure a stronger, more competitive auto industry.

"We will continue to work vigorously with the Congress and the administration during the next few weeks to address their concerns and to arrive at a solution that provides immediate aid to the auto industry," GM said.

Congress vs. White House

Democratic leaders support carving out $25 billion in loans to the Detroit 3 from the $700 billion federal bailout fund for financial institutions. President George W. Bush and GOP lawmakers have rejected that approach.

Reid said the CEOs of the Detroit 3, who testified before House and Senate committees this week, did not convince Congress that their companies could be made viable with more aid. He said he would look for accountability in the companies' plans.

Pelosi also expressed doubt that federal aid would make the Detroit 3 viable, But she rejected suggestions that the companies should file for bankruptcy protection.
 

Cadillac Tech

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I sure hope that this all gets settled SOON,money or no money just make a decision so we can get on with our lives. The unknown has everyone worried about their future. There has already been a lot of bad news in our dealership. Many long time employees have lost their jobs and it's just the start. For anyone that thinks that the collapse of the US auto industry isn't anything serious or won't affect their lives, should come to the midwest. It is much more life and death here. Let's all hope/pray that things will be better in '09.

God Bless the USA

Bruce :patriot:
 

Lola's Mom

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Absolutely, Bruce. You are right .... it is easy for us clear over here on the west coast to voice our opinions .... it is not our husbands, wives, father's and son's and neighbors that have their jobs, income and homes on the line. I would venture to say that every family you know is connected to the auto industry in one way or another. There's not a harder working section of the U.S. than our auto, steel and coal workers .... I love the midwest .... you guys have "heart." :patriot: I am so sorry that the economy is hitting your area so hard.
 
M

mswaim

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You will get an arguement from Doris who makes her living from car sales. It's no different here or anywhere the industry provides a job.

The problem is; what will they do different with tax payer money they didn't do with their own hard-earned cash???

That's a pretty easy question for most folks - but it is one that alludes the leadership at GM, Ford & Chrysler.

They are now being asked to provide a "plan" outlining how they will use the bailout money.

Let's see;

1) they will build smaller, lighter, more fuel efficient cars. CHECK!

2) they will re-negotiate their union contracts - Again! CHECK!

3) they will................whatever..........Again! CHECK!


Hey - try this; we will attempt to convince the american consumer that our cars/trucks are superior in every way to import models. HEY! WINNER WINNER; CHICKEN DINNER!!!!!!!!!!

Walk up to just about any person in any mall or office or store and ask them; who builds a better product; americans or japanese? You don't need me to provide their answer.

I buy american and I believe it is a superior product; what ****es me off is my belief in that thought is stronger than GM, Ford or Chrysler's leadership.

If they truly believed it as their only vision for the future - we would not be here right now.
 

Little Woman

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I sure hope that this all gets settled SOON,money or no money just make a decision so we can get on with our lives. The unknown has everyone worried about their future. There has already been a lot of bad news in our dealership. Many long time employees have lost their jobs and it's just the start. For anyone that thinks that the collapse of the US auto industry isn't anything serious or won't affect their lives, should come to the midwest. It is much more life and death here. Let's all hope/pray that things will be better in '09.

God Bless the USA

Bruce :patriot:

I agree with you Bruce. I do hope they settle soon. I do hope the big three will come back with plans that are going to work for everyone. It is affecting everyone. I'm ready to go buy a car. :patriot:
 

Lola's Mom

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I agree with you Bruce. I do hope they settle soon. I do hope the big three will come back with plans that are going to work for everyone. It is affecting everyone. I'm ready to go buy a car. :patriot:
Yeah, Marion ...... I know there's an XLR out there with your name on it ..... It's got to be RED to match your :reddevil personality! And when you get your plate, make sure it says SheDevil! :)
 

Little Woman

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Yeah, Marion ...... I know there's an XLR out there with your name on it ..... It's got to be RED to match your :reddevil personality! And when you get your plate, make sure it says SheDevil! :)
I keep telling Kevin there is an X out there with my name on it, but he won't listen:(. I'm thinking of getting a she devil tatto. Again Kevin. :(
 

standby-V

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It's not just the Midwest, cars are designed out here in the west by smaller companies and many small businesses are involved in these designs right around the corner from Santee or Aliso Viejo. We are going to feel it too. There is nothing to stop this from effecting the whole country, so get ready and I wouldn't buy a share in anything right now. H*ll, I'm thinking of taking my money out of one of the biggest banks in the country and hiding it my mattress. That may be the cowards way, but I've been around almost from the jumping out of windows and grandma, grandpa, mom, dad, uncles and aunts and me all lived in one house to save money. I was born in 1933 and that's to close to the crash, but I remember my dad telling me how bad it was and my grandpa was lucky to get a job running booze from off shore to the NYC and Jersey which let us live a better than average life. Ya gotta do what you gotta do to stay alive. I disagree that we do have our jobs homes and loved ones on the line over here. When it hits here it's going to hit big time.:patriot:
Absolutely, Bruce. You are right .... it is easy for us clear over here on the west coast to voice our opinions .... it is not our husbands, wives, father's and son's and neighbors that have their jobs, income and homes on the line. I would venture to say that every family you know is connected to the auto industry in one way or another. There's not a harder working section of the U.S. than our auto, steel and coal workers .... I love the Midwest .... you guys have "heart." :patriot: I am so sorry that the economy is hitting your area so hard.
 

Lola's Mom

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It's not just the Midwest, cars are designed out here in the west by smaller companies and many small businesses are involved in these designs right around the corner from Santee or Aliso Viejo. We are going to feel it too. There is nothing to stop this from effecting the whole country, so get ready and I wouldn't buy a share in anything right now. H*ll, I'm thinking of taking my money out of one of the biggest banks in the country and hiding it my mattress. That may be the cowards way, but I've been around almost from the jumping out of windows and grandma, grandpa, mom, dad, uncles and aunts and me all lived in one house to save money. I was born in 1933 and that's to close to the crash, but I remember my dad telling me how bad it was and my grandpa was lucky to get a job running booze from off shore to the NYC and Jersey which let us live a better than average life. Ya gotta do what you gotta do to stay alive. I disagree that we do have our jobs homes and loved ones on the line over here. When it hits here it's going to hit big time.:patriot:
My retirement accounts have been losing $$ for months ..... I simply decided that if I was going to continue to see a loss every quarter, I would take a chance .... believe it or not ... I have made a few dollars. :) And Monday I might lose them .... it wouldn't be the first time that I've taken a hit in the market. :rolleyes:

The point I was trying to make was that there is a bigger population of auto factory workers in the midwest ..... or maybe I am wrong on that too ..... ha-ha, I'm wrong so much that I'm getting used to being :bash: ...
 

standby-V

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No Ruthie I wasn't bashing, I too was just trying to let everyone know that we aren't in any better shape out here and if it gets worse we will feel it more than anyone because we have so many people out her with big bucks that we could have an earthquake if it hits us bad. People high on the ladder have much further to fall and land harder, so we aren't immune by any stretch. Fingers cossed here.
My retirement accounts have been losing $$ for months ..... I simply decided that if I was going to continue to see a loss every quarter, I would take a chance .... believe it or not ... I have made a few dollars. :) And Monday I might lose them .... it wouldn't be the first time that I've taken a hit in the market. :rolleyes:

The point I was trying to make was that there is a bigger population of auto factory workers in the midwest ..... or maybe I am wrong on that too ..... ha-ha, I'm wrong so much that I'm getting used to being :bash: ...
 

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