Last Hope-Automakers bailout-Pelosi, Reid to Seek Automakers Bailout Next Week

It's Next Week Or bust! Will The Automakers get the rescue money they need?

ABC News' Jonathan Karl reports: House Speaker Nancy Pelosi says she'll seek assistance for Detroit automakers during a lame-duck session next week.

The idea is to pass a bill opening up some of the $700 billion bailout money for the automakers.

I am told Pelosi will also likely seek an extension of unemployment benefits but wait until January for a major stimulus package.

"In order to prevent the failure of one or more of the major American automobile manufacturers, which would have a devastating impact on our economy, particularly on the men and women who work in that industry, Congress and the Bush Administration must take immediate action," reads a statement by Pelosi.

"Emergency assistance to the automobile industry would be conditioned on executive compensation restrictions, a prohibition on golden parachutes, rigorous independent oversight, and other taxpayer protections to ensure that any companies that benefit from this assistance – and not the taxpayers – bear the full burden of repaying any costs that are incurred."

And now Senate Majority Leader Harry Reid says he "determined" to pass legislation helping the automobile industry next week during a lame-duck session of Congress.

Reid's statement offers no specifics and reminds us that until January "we still have the slimmest of majorities in the Senate; this will only get done if President Bush and Senate Republicans work with us."

On that point:

The White House is lukewarm to Pelosi's idea of using some of the $700 billion banking bailout money for the automobile industry. One senior White House official told me it's "a slippery slope" and asked rhetorically, "who's next?"

The White House would prefer Congress pass legislation loosening the restriction on the $25 billion in loans Congress made available to Detroit in September. That money, under current law, must be used for fuel efficient technology. So far, not one dollar of it has been loaned. The auto industry says it needs money to stay alive, not to embark on new projects.

"Why does Speaker Pelosi absolutely refuse to use the $25 billion actually appropriated for the automobile industry?" asks the official. Answer: environmental groups don’t want the money to be diverted.

Meanwhile, the auto industry likes Pelosi's approach, but sees it as a stopgap measure until the new Congress passes something more comprehensive in January. As one auto industry source working with Congressional leaders told me, "We're talking about a bridge loan, a bridge to the stimulus."


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Fox News-Pelosi, Auto Execs and UAW to Meet

DETROIT — House Speaker Nancy Pelosi will sit down Thursday with the leaders of Detroit's automakers and their workers as the industry seeks federal funding needed to survive a dramatic downturn.

Two people familiar with plans for the meeting said the top executives of General Motors Corp., Ford Motor Co. and Chrysler LLC, along with the union's president, will meet with Pelosi to talk about the impact of the credit crisis and the industry's access to government funding.

She'll meet in Washington with Bob Nardelli of Chrysler, Alan Mulally of Ford, Rick Wagoner of GM and United Auto Workers President Ron Gettelfinger, the people familiar with the meeting plans said.

The officials spoke on the condition of anonymity because the meeting is private.

Pelosi has called for Congress to enact a stimulus program to shore up the sinking economy during its lame-duck session.

News of the meeting came Wednesday as Detroit automakers and their allies in Congress said Barack Obama's victory could help U.S. automakers line up federal funding.

Obama made it clear during his campaign that he understood the automakers' problems and would work to preserve the industry, U.S. Sen. Carl Levin, D-Mich., said Wednesday.

"I'm very optimistic that we're going to have a fighter in the White House for manufacturers, and that's what we need," Levin said.

Levin said he was told Wednesday by Jason Furman, Obama's senior economic adviser, that government aid is atop Obama's agenda. Levin said Furman did not commit to a specific funding path for the industry but was supportive.

Obama has said he would meet with industry leaders and the United Auto Workers immediately to talk about helping automakers, but a meeting has not yet been scheduled.

Levin noted that Obama expressed support for doubling an Energy Department loan program for automakers to develop fuel-saving technology to $50 billion from $25 billion.

Michigan's other senator, Democrat Debbie Stabenow, said Senate Majority Leader Harry Reid, D-Nev., appears open to supporting another $25 billion in flexible funding.

Reid, she said, appeared open to supporting "whatever we feel is the best approach for the auto industry and can get the consensus in the House to pass."

Levin said members of Michigan's congressional delegation would pursue options to help the industry, including the $700 billion Wall Street bailout or access to Federal Reserve capital.

On Wednesday night, the Department of Energy released rules for getting the $25 billion in loans that could get money into automakers' hands by the end of the year.

Obama's victory over Republican John McCain came just three days before General Motors Corp. and Ford Motor Co. are to release their third-quarter results, which almost certainly will show billions in losses and cash burn rates that will push the companies closer to emptying their treasuries if auto sales don't bounce back soon.

Further job cuts by both automakers are expected on Friday. Analysts say GM could close more plants but Ford has said it will likely do temporary factory shutdowns and overtime cuts at some of its car plants. Some new engines and models will be delayed.

Troy Clarke, GM's president for North America, said in remarks prepared for a speech Wednesday night in Detroit that the next 100 days are critical for GM and the auto industry.

The company, he said, made cuts to save cash earlier this year, but more are coming.

"I'd like to say we're done, but once again, market and economic conditions have continued to decline," he said in a text of the speech provided by GM. "We must be adaptable and ready to make needed changes quickly, particularly over the next 100 days."

GM is talking with Chrysler majority owner Cerberus Capital Management LP about GM acquiring Chrysler. GM reportedly is after Chrysler's roughly $11 billion in cash and is seeking federal aid to make the deal happen.

A person briefed on the GM-Chrysler talks said Wednesday that no announcement of a deal is imminent because much of it hinges on federal aid. The person asked not to be identified because the talks are private.

A further indication of GM's woes came Wednesday when its auto financing arm, GMAC Financial Services, reported a $2.52 billion third-quarter loss. GMAC is 51 percent owned by private equity firm Cerberus, while Detroit-based GM holds the rest.

Also Wednesday, House Speaker Nancy Pelosi again called for a lame-duck session of Congress to enact a stimulus program to shore up the sinking economy. It was unclear whether aid for the troubled automakers would be part of that package.

Automakers say some sort of government funding is necessary to bail out the troubled industry. They have been lobbying to speed up loans from the Energy Department pot, and for access to part of the $700 billion Wall Street bailout plan and perhaps other funding.

Also on Wednesday, the Center for Automotive Research published a report estimating that about 2.5 million jobs across the economy would disappear in the first year if the U.S. auto industry shrinks by 50 percent.

Only 239,000 of those job losses would be at the Detroit Three — the remainder would be at parts suppliers and related industries, the Ann Arbor-based center said.

Cerberus Chairman John Snow said Wednesday that Obama needs a bipartisan plan to counter the worst economic downturn in about 50 years.

"What we need is to make sure that a vital industry like autos ... which is such a big part of the overall economy, doesn't lead us into a deeper and harsher downturn," Snow, who served as treasury secretary under President Bush from 2003 to 2006, said in an interview on the CNBC cable channel. "The collapse of the auto industry at this time would be devastating for a new president."

GM is burning through more than $1 billion per month and analysts have said the company could reach the minimum cash levels required to operate sometime next year. They say Chrysler could go into bankruptcy next year if it doesn't take on a partner or isn't acquired by another automaker, raising the specter of tens of thousands of lost jobs or the need for the government to take over the company's pension obligations.

GMAC has said it is having discussions with U.S. federal regulators about becoming a bank holding company, a move that could help it access government funding and be part of a potential acquisition of Chrysler.

A GM-Chrysler deal could lead to job cuts of 24,000 to 35,000, according to industry analysts. They have predicted GM could close half of Chrysler's 14 manufacturing plants and consolidate engineering, design, finance and other operations. Another 50,000 auto supplier jobs could also be lost.

Most of the losses would be in Michigan, but analysts say the alternative of Chrysler being sold in pieces would result in many more job cuts than a GM acquisition....Article-FoxNews
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Fox News-Pelosi, Auto Execs and UAW to Meet

DETROIT — House Speaker Nancy Pelosi will sit down Thursday with the leaders of Detroit's automakers and their workers as the industry seeks federal funding needed to survive a dramatic downturn.

Two people familiar with plans for the meeting said the top executives of General Motors Corp., Ford Motor Co. and Chrysler LLC, along with the union's president, will meet with Pelosi to talk about the impact of the credit crisis and the industry's access to government funding.

She'll meet in Washington with Bob Nardelli of Chrysler, Alan Mulally of Ford, Rick Wagoner of GM and United Auto Workers President Ron Gettelfinger, the people familiar with the meeting plans said.

The officials spoke on the condition of anonymity because the meeting is private.

Pelosi has called for Congress to enact a stimulus program to shore up the sinking economy during its lame-duck session.

News of the meeting came Wednesday as Detroit automakers and their allies in Congress said Barack Obama's victory could help U.S. automakers line up federal funding.

Obama made it clear during his campaign that he understood the automakers' problems and would work to preserve the industry, U.S. Sen. Carl Levin, D-Mich., said Wednesday.

"I'm very optimistic that we're going to have a fighter in the White House for manufacturers, and that's what we need," Levin said.

Levin said he was told Wednesday by Jason Furman, Obama's senior economic adviser, that government aid is atop Obama's agenda. Levin said Furman did not commit to a specific funding path for the industry but was supportive.

Obama has said he would meet with industry leaders and the United Auto Workers immediately to talk about helping automakers, but a meeting has not yet been scheduled.

Levin noted that Obama expressed support for doubling an Energy Department loan program for automakers to develop fuel-saving technology to $50 billion from $25 billion.

Michigan's other senator, Democrat Debbie Stabenow, said Senate Majority Leader Harry Reid, D-Nev., appears open to supporting another $25 billion in flexible funding.

Reid, she said, appeared open to supporting "whatever we feel is the best approach for the auto industry and can get the consensus in the House to pass."

Levin said members of Michigan's congressional delegation would pursue options to help the industry, including the $700 billion Wall Street bailout or access to Federal Reserve capital.

On Wednesday night, the Department of Energy released rules for getting the $25 billion in loans that could get money into automakers' hands by the end of the year.

Obama's victory over Republican John McCain came just three days before General Motors Corp. and Ford Motor Co. are to release their third-quarter results, which almost certainly will show billions in losses and cash burn rates that will push the companies closer to emptying their treasuries if auto sales don't bounce back soon.

Further job cuts by both automakers are expected on Friday. Analysts say GM could close more plants but Ford has said it will likely do temporary factory shutdowns and overtime cuts at some of its car plants. Some new engines and models will be delayed.

Troy Clarke, GM's president for North America, said in remarks prepared for a speech Wednesday night in Detroit that the next 100 days are critical for GM and the auto industry.

The company, he said, made cuts to save cash earlier this year, but more are coming.

"I'd like to say we're done, but once again, market and economic conditions have continued to decline," he said in a text of the speech provided by GM. "We must be adaptable and ready to make needed changes quickly, particularly over the next 100 days."

GM is talking with Chrysler majority owner Cerberus Capital Management LP about GM acquiring Chrysler. GM reportedly is after Chrysler's roughly $11 billion in cash and is seeking federal aid to make the deal happen.

A person briefed on the GM-Chrysler talks said Wednesday that no announcement of a deal is imminent because much of it hinges on federal aid. The person asked not to be identified because the talks are private.

A further indication of GM's woes came Wednesday when its auto financing arm, GMAC Financial Services, reported a $2.52 billion third-quarter loss. GMAC is 51 percent owned by private equity firm Cerberus, while Detroit-based GM holds the rest.

Also Wednesday, House Speaker Nancy Pelosi again called for a lame-duck session of Congress to enact a stimulus program to shore up the sinking economy. It was unclear whether aid for the troubled automakers would be part of that package.

Automakers say some sort of government funding is necessary to bail out the troubled industry. They have been lobbying to speed up loans from the Energy Department pot, and for access to part of the $700 billion Wall Street bailout plan and perhaps other funding.

Also on Wednesday, the Center for Automotive Research published a report estimating that about 2.5 million jobs across the economy would disappear in the first year if the U.S. auto industry shrinks by 50 percent.

Only 239,000 of those job losses would be at the Detroit Three — the remainder would be at parts suppliers and related industries, the Ann Arbor-based center said.

Cerberus Chairman John Snow said Wednesday that Obama needs a bipartisan plan to counter the worst economic downturn in about 50 years.

"What we need is to make sure that a vital industry like autos ... which is such a big part of the overall economy, doesn't lead us into a deeper and harsher downturn," Snow, who served as treasury secretary under President Bush from 2003 to 2006, said in an interview on the CNBC cable channel. "The collapse of the auto industry at this time would be devastating for a new president."

GM is burning through more than $1 billion per month and analysts have said the company could reach the minimum cash levels required to operate sometime next year. They say Chrysler could go into bankruptcy next year if it doesn't take on a partner or isn't acquired by another automaker, raising the specter of tens of thousands of lost jobs or the need for the government to take over the company's pension obligations.

GMAC has said it is having discussions with U.S. federal regulators about becoming a bank holding company, a move that could help it access government funding and be part of a potential acquisition of Chrysler.

A GM-Chrysler deal could lead to job cuts of 24,000 to 35,000, according to industry analysts. They have predicted GM could close half of Chrysler's 14 manufacturing plants and consolidate engineering, design, finance and other operations. Another 50,000 auto supplier jobs could also be lost.

Most of the losses would be in Michigan, but analysts say the alternative of Chrysler being sold in pieces would result in many more job cuts than a GM acquisition....Article-FoxNews
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