April 5th, 2009
10:30 AM ET
4 years ago

Stabenow: Bankruptcy should not be an option for auto industry

(CNN) - Bankruptcy for the nation's largest auto companies should not be an option, Michigan Sen. Debbie Stabenow told CNN Sunday.

In an interview with CNN's John King on State of The Union, the Michigan Democrat said she supports the Obama administration's commitment to the auto industry as it tries to formulate a viable business plan to move forward.

"I do not support bankruptcy, certainly as the first, second, or third options," Stabenow said. "I am still very concerned, because… there are 600,000 retirees whose pensions, by the way, would become a federal liability in the worst case scenario in a bankruptcy."

"There are tens of billions of dollars, I've heard upwards of $80 billion in federal requirements, federal dollars that would be needed potentially, if they went into bankruptcy," she continued. It certainly is not my first option. And I know that it's not the first option of the administration."

But Sen. Bob Corker, R-Tennessee, also appearing on CNN's State of the Union, said bankruptcy is a possibility for the beleaguered auto companies.

"I do disagree with the government just coming in and taking over a company like this. I think that was heavy-handed," Corker said in reference to the administration's request last week that former GM CEO Rick Wagoner resign his post. "I think that is something that we'll look back on in several years and be very concerned about but I hope they are successful."

In an interview that appeared on CNN's State of The Union earlier Sunday, GM's new CEO Fritz Henderson suggested bankruptcy remains a possibility for his struggling company.

"[Bankruptcy] may very well be the best solution for the company," he said.


Filed under: Bob Corker • Debbie Stabenow • State of the Union
soundoff (57 Responses)
  1. Richard A. Spomer, Alexandria, VA

    .I do believe that President Obama had helped to guide or directed the auto industry towards that decision. Dump a little more on the tax-payers; I do believe that we all deserve a car of our choice at this point

    April 5, 2009 03:27 pm at 3:27 pm |
  2. jj12343

    Dave NYC April 5th, 2009 11:09 am ET

    Republicans are singing the bankruptcy tune these days… doesn't anyone wonder why that's not considered "Defeatism?"

    Great idea GOP, just let all those people lose their retirements… you don't care about "the little people" anyway do you?
    ____________________________________________________
    Obama said last week that bankruptcy may be necessary, so I guess that would be considered defeatism as well or is it just when republicians say it.

    April 5, 2009 03:30 pm at 3:30 pm |
  3. Farrell, Houston, Tx

    Some people don't believe Rick Wagoner, CEO of GM, should have been let go. I bet there are many people out there who were doing their job with less pay than what Wagoner was making and have been let go. CEO's are paid well to run a successful company and that doesn't mean just collecting a heafty check for failure.

    April 5, 2009 03:30 pm at 3:30 pm |
  4. jj12343

    So much for union concessions, the last go around they lowered wages and benefits for new hires, how many new hires have there been lately.

    April 5, 2009 03:32 pm at 3:32 pm |
  5. Mark, B'ham., Al.

    The democrats do not care either or they would stop this stupid Cafe Requirements to help the auto industry. All the safety, emmissions and fuel milage regulations have hurt the industry as much as it has tried to help. For example an article I read a couple of months ago was talking about the Honda CRX from over 20 years ago (I know it is not American) which got 57 mpg. With todays emmisiions and safety standards, the same car would only get 47 mpg. The industry cannot win. Also Americans bought what they liked which was SUV's. I would not trade my Jeep Wrandler Limited for a small car to get better gas milage, It fits my family of 5 so we can go somewhere together not in 2 cars. Also it can carry 2 weeks worth of groceries as that is how I shop at the nearest military base, try to fit that into a Honda Fit, NOT! And last but not least, I am not for bailing out any industry either manufacturing or financial because I do not want to put all this debt on my children and grandchildren. The democrats want to take over our retirements anyway looking to nationalize the 401-K system so they can use it like they did social security to write IOU's to pay for their socialist/ welfare state agenda.

    April 5, 2009 03:50 pm at 3:50 pm |
  6. Syed Rahman

    The fact of the matter is the automakers are not in trouble because of "mis-management", its because of lowered volumes. GM, Chrysler, and Ford all went through major restructuring and if the auto industry volume was at or above 15mil units none of these companies would be losing money right now. Remember, the industry had been consistently selling 16mil+ units every year for good part of the last decade. Ford does not need cash because it borrowed $25 Bil when the credit markets were good in 2006. Even Toyota and Honda are losing money at the moment but like Ford they have cash to burn. Even then, Toyota motor credit asked the Japanese government for bailout funds. Chrysler and GM's restructuring came when the volumes dropped due to the credit freeze. It's not that people didn't want to buy a Chevy or a Dodge. It was that they couldn't get a loan to buy one. Let's help these companies and lets open up the credit markets so the auto volumes will go up and the automakers will be return the taxpayer's money.

    April 5, 2009 09:20 pm at 9:20 pm |
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