December 4th, 2008
10:30 AM ET
5 years ago

Big 3 CEOs return to plead for up to $34 billion from Congress

As sales plunge, the Big Three are back to plead for a bailout.
As sales plunge, the Big Three are back to plead for a bailout.

(CNNMoney.com) - The CEOs of the leading automakers were back before Congress Thursday, arguing for a larger bailout than they asked for just two weeks ago, and hoping to undo the damage they did to their case at the earlier hearings.

The three automakers are now asking for up to $34 billion in federal loans, up from their earlier request for $25 billion in assistance. Two of them, General Motors and Chrysler LLC, are warning that without immediate help, they could run out of the money they need to operate before the end of the year.

This time GM CEO Rick Wagoner, Ford Motor CEO Alan Mulally and Chrysler CEO Robert Nardelli drove fuel-efficient hybrids to Washington, rather than flying in on corporate jets as they did two weeks ago.

Ford and GM have since announced they will sell their jets. And all three CEOs have agreed to cut their pay to $1 a year if they get the federal help they are seeking.

After presenting plans to Congress Tuesday that detailed how they would use loans to return to profitability, each company warned of tremendous damage to the economy if they are forced to file for bankruptcy because of lack of help.

In prepared testimony Thursday, Mulally quoted an estimate from Goldman Sachs that said the impact to the economy from failures could be up to $1 trillion.

But the Big Three face an uphill battle to get loans approved by a skeptical Congress. Even the Democratic leaders of the House and Senate who are in favor of help for the automakers have refused to commit to calling the outgoing members of Congress back next week to vote on an auto bailout.

Congressional leaders are concerned that public opinion has turned strongly against help for the automakers. A CNN/Opinion Research Corp. poll of nearly 1,100 Americans conducted earlier this week found 61 percent oppose a bailout while only 36 percent support it. Even in the Midwest, home to most of the automakers' remaining plants, 53 percent of those polled said they oppose federal help.

That was a sharp reversal from polls taken before the CEOs last trip to Capitol Hill. A poll November 11 and 12 conducted by Peter D. Hart Research Associates found 55 percent supported federal assistance for automakers at that time, and only 30 percent believed they should not get federal help.


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soundoff (183 Responses)
  1. LIP

    Wheeling and dealing, the big three arrive in Washington. Of course they humbled themselves and rode in a "car"...how depressing this must have been...riding in one of those gas guzzling, air polluting things they build and sell at huge margins.
    First they come with their hands out and ask for $24 Billion and then the next time, just like a bunch of wheeler dealers, they show up and ask for $34 Billion. Does this say much for their math and ability to run a business when they are off by $10 Billion? Surely Congress can see through this masquarade? Probably not, since these same businesses have probably been lining their pockets for years.
    Send them packing or we will vote all you people out next time around.

    December 4, 2008 03:16 pm at 3:16 pm |
  2. Chad, Wisco

    Get rid of UAW and maybe we'll talk. They are one of the main reason that costs have gone up for the American vehicles. I am not for tax payers money going towards the UAW so they can continue to strong arm these companies into ridiculously high wages and benefits.

    December 4, 2008 03:16 pm at 3:16 pm |
  3. Learn from the past

    Didn't something similar to this happen in the 1970's?

    The automakers making vehicles that no one wanted or could afford. The Japanese automakers making huge gains by manufacturing inexpensive, fuel efficient cars.

    I guess they didn't learn from their mistakes.

    What if the common American worker runs into financial trouble?

    Who's going to bail us out?

    And I don't make as much as the $ 90,000.00/year factory workers plus benefits.

    What about their parachute? 95% of their pay even if they get laid off?

    6 out of 10 people in a CNN poll are against this bail out.

    December 4, 2008 03:21 pm at 3:21 pm |
  4. J. Dean

    AFTER LISTENING TO THE THREE AUTO CEO'S, I DO NOT BELIEVE THAT THE PROGRAMS PRESENTED BY THE AUTO CHIEFS WILL HELP THE AMERICAN AUTO INDUSTRIES.
    THE DESTINY OF THE THREE IS INDEED IN A VERY BAD SHAPE. THEY DO NOT DESERVE ANY FINANCIAL RESCUE HELP FROM THE US TAX PAYERS. WHY SHOULD ANY PERSON GIVE MONEY TO A COMPANY HAVING THE SAME MANAGEMENT THAT ARE RESPONSIBLE FOR THE FAILURE OF THEIR RESPECTIVE COMPANY !
    THE AUTO MANUFACTURERS MUST BE REORGANIZED AND LET THE CURRENT MANAGEMENT GO BEFORE A SIGLE PENNY IS GIVEN TO THOSE LOOSERS.
    THE AMERICAN AUTO INDUSTRIES SHOULD HAVE COMPLETELY REORRIENTED THE AUTO INDUSTRY IN 1973. WHAT HAVE THEY DONE FOR 35 YEARS IS ABSURD. THERE SHOULD BE NO MONEY, ESPECIALLY TAX PAYERS' MONEY GIVEN TO THOSE COMPANIES WHOSE MANAGEMENT ARE THE ONLY PERSON RESPONSIBLE FOR THEIR CURRENT DISASTRUOUS CONDITIONS.
    NO PUBLIC MONEY. WILL THERE BE AN END TO THESE GIVEAWAYS OF OUR PRECIOUS DOLLARS ?

    December 4, 2008 03:23 pm at 3:23 pm |
  5. David

    This issue is just a failure of our government to manage the financial institutions, and the result of their subsequent failure has restricted the dealers and general public from access to credit. Without credit, consumers cannot buy cars. If consumers cannot buy cars, dealers cannot sell cars and manufacturing flow breaks down.

    This combined with our government in corporation with oil companies plan to price gouge the public by allowing fuel costs to triple for no reason, since even during two wars, pricing has come back down as it was before the wars began.

    It's never been about better cars or more efficient cars, since the American automakers sell over 50% of the vehicles sold in America and in the rest of the world, and are now leading in quality, safety and fuel overall fuel economy.

    It's really about keeping the American public watching the little red bouncing ball, to keep them preoccupied while hundreds of billions are given to Wall street with no clear stipulations.

    December 4, 2008 03:31 pm at 3:31 pm |
  6. TJ

    If we aren't to going help the big 3 through the credit crisis because if the credit market doesn't work the car market doesn't either and frankly if we can't help the big 3 out this small amount then we have no business bailing out banks the scum of the earth nor do we have the need then of a money wasting government or government period. A possible of the even one of the big 3 going down would be far more damaging and destructive to the economy as a whole that i'd rather see citigroup or AIG go up in smoke.

    December 4, 2008 03:35 pm at 3:35 pm |
  7. Jim

    In regards to the "dog and pony show" that is going on with the big 3 automakers, I simply have 1 question:

    How much money is given EVERY YEAR to farm bills and agricultural subsidies and why don't we have hearings EVERY YEAR before this money is granted?

    December 4, 2008 03:37 pm at 3:37 pm |
  8. sandee in Portland

    @Trang, I have only owned 2 cars in my lifetime that weren't american made, an Austin Healey and an MG. I currently drive my 5th Corvette and have never had a problem with an american made car. Of course, I take care of them and get them serviced regularly. This is what's wrong with the entire manufacturing section of our country. We don't purchase our own products. I needed to buy a new washer and dryer this year and in researching where they were made, purchased a Whirlpool because it and Maytag were the only ones made in the U.S. Maybe, instead of continually complaining, we should all go back to buying American made products.

    December 4, 2008 03:37 pm at 3:37 pm |
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