Auto CEOs seek loan help
WASHINGTON -- The U.S. auto industry is facing the worst business conditions in more than 30 years, and its problems could affect tens of thousands of workers, the chief executives of Detroit's three automakers told congressional leaders Wednesday as they lobbied for $25 billion in federal loans.
The executives -- General Motors Corp. Chairman and CEO Rick Wagoner, Ford Motor Co. CEO Alan Mulally and Chrysler LLC Chairman and CEO Bob Nardelli -- did not tie the fate of the loans on Wednesday to future job cuts, but did say in a letter that the loans "could provide much-needed access to low-cost capital at a critical time for the domestic auto industry."
The housing crisis, restrained credit, high oil prices and rising commodity costs "have the potential to severely impact tens of thousands of employees and have a lasting effect on industrial production in the U.S."
The auto executives also asked Congressional leaders to widen the loans so that more vehicles and parts could qualify.
Under last year's energy bill, models would have to get 25% better fuel economy than their competitors in order to get federal aid; Wagoner has said that figure could be set as low as 10%.
All three circled Capitol Hill on Wednesday, meeting Democratic and Republican leaders.
It's likely the last in-person push the executives will make before Congress tackles the loans, which isn't expected until sometime late next week.
"The support we got was very encouraging," said Nardelli following a meeting with House Speaker Nancy Pelosi, D-Calif. "I thought the conversations we had on the hill were very encouraging, very candid and very straightforward."
Senate Majority Leader Harry Reid said Wednesday that funding at least part of the $25 billion in federal loans sought by the U.S. auto industry was "extremely important," even as Wall Street's financial meltdown grabbed Congress' attention.
Reid, D-Nev., also said Congress would likely wait until the end of its session to consider the funding as part of the budget resolution that will keep the government open through the elections.
Pelosi had suggested the same on Tuesday, giving automakers until the end of next week to lobby lawmakers.
"It's extremely important we try to do something," Reid said, adding that compared with the Wall Street bailouts, the cost of the $25-billion loan program -- estimated at $7.5 billion -- is "small change."
The $7.5-billion figure, from the Congressional Budget Office, takes into account the government's cost of subsidizing the loans' interest plus possible defaults.
"To middle-class America, these are jobs building cars, and we should be manufacturing these cars here," he said.
With presidential candidates Barack Obama and John McCain both backing the loans, little organized opposition has formed against the auto industry's drive.
The White House has yet to commit to the proposal.
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