Auto executive specifics about how they plan to spend taxpayers' money and crimp their highflying lifestyles if they hope to get aid from the federal government, congressional leaders and key members of the incoming Obama administration said Sunday.
"What we can't give is a blank check for an industry that isn't prepared to retool itself," David Axelrod, a senior adviser to President-elect Barack Obama, said on Fox News Sunday.
"I would hope they will come back to Washington in early December on commercial flights with a plan to do that."
Key policymakers on the Sunday news shows warned that efforts to help the auto industry have been complicated by its CEOs, who flew private jets to Washington last week to ask for a bailout and failed to present a convincing business plan. "That was crazy," Austan Goolsbee, one of Obama's top economic advisers, said on CBS' Face the Nation.
Exasperation focused on executive extravagance — House Speaker Nancy Pelosi, D-Calif., on CBS, called the auto company CEOs' eight-figure salaries "staggering" — and on the lack of details about how they intend to use the taxpayers' dollars. "If they need a bridge, it's got to be a bridge to somewhere, not a bridge to nowhere," Goolsbee said.
Pelosi and Senate Majority Leader Harry Reid, D-Nev., are giving the Big Three executives until Dec. 2 to present "a credible restructuring plan" and are holding out the prospect of calling Congress back for an unusual second lame-duck session the following week to vote on it.
To qualify for government aid, the automakers — General Motors (GM), Ford (F) and Cerberus Capital-owned Chrysler — will have to agree to extensive government oversight, a ban on dividends and "excessive" executive compensation, and production of more fuel-efficient vehicles, the Democratic congressional leaders said in a letter to the auto executives Friday.
Their letter outlined the reasons why many Democrats and Republicans want to help Detroit. "One in 10 American jobs is related to auto manufacturing," Reid and Pelosi wrote. "Our national security depends on the industry's technologies and manufacturing capacity." Obama, in his first press conference as president-elect earlier this month, sounded a similar note, calling the U.S. auto industry "the backbone of American manufacturing."
Skeptics argue that a federal bailout of the auto industry would amount to rewarding incompetence. "They've been paid billions — millions and millions of dollars for running weak companies," Sen. Richard Shelby of Alabama, the top-ranking Republican on the Senate Banking Committee, said of the automotive CEOs on ABC's This Week. Shelby favors forcing the auto companies to restructure through bankruptcy proceedings.
That strategy will backfire, warned Michigan Gov. Jennifer Granholm on CNN's Late Edition. "Nobody is going to buy a car from a bankrupt automaker," Granholm said.
Appearing on the same program, Sen. Carl Levin, D-Mich., said it is a matter of months before the automakers' cash runs out. "The question is, are we going to allow this industry to go under?" he said. Although Obama will not take office until Jan. 20, Levin said he'd like the president-elect "to at least offer to become more involved" in bailout talks. "He is a person who can really bring people together," the senator said.
Granholm predicted that the Detroit auto executives will return to Washington prepared to make a better case for their companies' survival.
"This was not their best week," she said.
This story posted by LeaseTrader.com, the automotive service company that lets people transfer out of their Car Leases early. If you're looking to swap a lease or transfer out of your car lease, please visit www.leasetrader.com