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

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

[cnn-photo-caption image= http://i2.cdn.turner.com/cnn/2008/images/12/04/art.cars.gi.jpg caption="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.


Filed under: Uncategorized
soundoff (183 Responses)
  1. Park

    CHRYSLER IS OWNED BY A PRIVATE CAPITAL FIRM!! (Cerberus) Why in the world should tax payers bail them out???

    December 4, 2008 11:57 am at 11:57 am |
  2. gary n.

    I'm amazed at the number of people in this country that want to see the re-emergence of soup lines. Can we really afford to lose 3-4 million jobs in one fell swoop ?

    December 4, 2008 11:59 am at 11:59 am |
  3. bababear

    34B is relatively peanuts to save millions of jobs. Why should we punish all those workers due to the greed and mismanagment of the top dozen or so. Make them accountable – not those employed. The unions hav said they will work with and make consessions, too. Lets not punish the little man and ourselves ultimately because of a knee jerk anger at Wall Street Greed and their bailout

    December 4, 2008 12:00 pm at 12:00 pm |
  4. Former republican army wife

    Why are these guys being allowed to keep their jobs? If your business fails, and you come begging to the feds for money, one of the stipulations should be that the head of the company needs to be replaced. Why give more money to the same people that ran the business into the ground? These UAW people need to give a bit as well. I learned yesterday that new UAW hires are guaranteed $14.00 an hour to START, that's part of the UAW contract. That's ridiculous. No college needed, no prior training needed, incredibly good health care plan, and $14.00 an hour starting pay, that's why these auto makers are going under. The UAW has been sucking them dry for years. Foreign automakers are way ahead of us not because of they make better cars(which they do), but because of their contracts with their workers. This is a joke. Who's going to bail out the mom and pop shops that are going out of business daily all across the USA?

    December 4, 2008 12:00 pm at 12:00 pm |
  5. Max Roll

    I'm with Mitt Romney on this one. Let the auto industry go bankrupt. They can reorganize and rebuild from the ground up. This problem arose from poor management. External factors played a huge role in this, but a clean slate with new prospects and management would be extremely beneficial in the long-run.

    December 4, 2008 12:04 pm at 12:04 pm |
  6. sbkilb Ct

    Let them file for bankrupcy, reorganize and start over. Why not give that 700 billion dollars to the American taxpayer. I think it would come out to about 65 thousand per person. We would then be putting cash into the system, keeping jobs I really don't like owning banks,and auto companies... unless I can put it on my resume.

    December 4, 2008 12:06 pm at 12:06 pm |
  7. Watermann

    Folks,
    first of all I fully understand your comments. But did you forget that for to many years everybody was asking for pick ups or SUVs under the headline "there is nothing but cubic"? You have been the "market" for a very long time. Now, everybody is blaming the Big 3. This is similar to the housing market where everybody thought that the bubble will never burst.
    The new President will hopefully turn the page and the US citizens will follow his ideas and values. If not, the result, not only for the US, will be horrible. Please grow up and forget the past. The future is our challenge.

    December 4, 2008 12:08 pm at 12:08 pm |
  8. Catherine

    AE, the big 3 automakers have to deal with unions and high health care costs that Honda and Nissan do not. There are also regulations that have been imposed on US automakers that make them less competitive that have not been imposed on foreign manufacturers. We need to help Michigan and Ohio and all of the people who count on these companies.

    December 4, 2008 12:13 pm at 12:13 pm |
  9. Paige

    Don't give them a penny!

    December 4, 2008 12:13 pm at 12:13 pm |
  10. Rob R

    The airlines didn't beg for a bailout and instead filed for bankruptcy to restructure. United, US Airways, Northwest – they are all still in business after going through a restructuring. That's what these auto companies need to do.

    They need to bring in new blood at the top that can think outside the box and figure out how to develop attractive, fuel-efficient or electric cars that can compete with and exceed Japanese standards.

    I fear though, now that gas is back down under $2 that people are going to quickly forget the pain of $4 gas and think that they can eventually just go back to buying big gas guzzling SUVs.

    December 4, 2008 12:15 pm at 12:15 pm |
  11. BS not Maverick

    Not unless they go to Bank-O.

    December 4, 2008 12:16 pm at 12:16 pm |
  12. Dianne

    Will these greedy fat cats use the money in their foreign operations. Are those the people who will profit with more hiring? Will the auto bosses bailout the foreign parts of their company? I want all the money to be in the U S to hire our own. Why not replace top management? They have proved for over 25 years they cannot get the job done. And Chrylser, this is their second time around. Did Chrysler not learn the lessons from before as they were sinking further into despair?

    December 4, 2008 12:16 pm at 12:16 pm |
  13. Mary - Independent

    No bailout for the greedy CEO's. We all know they want it for themselves. This country is in enough debt.

    December 4, 2008 12:18 pm at 12:18 pm |
  14. David

    This is just another waste of money. They will get their billions and they won't turn it around unless they can give us cars that are better than Toyota and Honda and if they get the gas alternative cars on track. the whole bailout is a scam anyway. it is thievery of America.

    December 4, 2008 12:19 pm at 12:19 pm |
  15. Matt

    In response to Karon, the AIG CEO did say he would take a $1 salary. When does it end? You can't bail out everyone, let the auto industry fail. They dug their own hole when the submitted to labor unions and didn't adapt using technology we already have.

    December 4, 2008 12:20 pm at 12:20 pm |
  16. sam

    I have an idea. Let me use my own tax liability money to pay the $12,500 health insurance bill my husband and I face every year as retired 60 yr olds. As it is, we will be paying not only for our own, but to support two auto workers and their families. So much for preparing for our own retirement. Or is this BO's idea of redistributing OUR wealth?

    December 4, 2008 12:20 pm at 12:20 pm |
  17. Agnes Fleming

    My instincts tell me that the three car companies should be left to sink for mismanagement and poor business decisions. If the ordinary consumer – who will the taxpayer bailing out GM, Chrysler and Ford in this case – made the same decisions in their credit and purchasing choices, as many have, they WILL go into bankruptcy, but will not have the opportunity to restructure and come out a year or two later in better condition than before. On the contrary, the consumed's interest rates are jacked up to usary levels of 30+% and are dangling in bankruptcy hell for ten years or more. It is time these big corporations suffered likewise, instead of rewarding themselves huge salaries, bonuses and stock options, and cars people no longer want to buy. While the collapse of Enron, Worldcom and there ilk were based on fraud, where is the fine line between corporate deceit and deception of the consume that is crossed into fraudulent practices?

    December 4, 2008 12:21 pm at 12:21 pm |
  18. Ted:Canada

    SAD!

    CEO hurt their own efforts...

    1. Last time they came in jets
    2. This time they came in cars
    3. Offered to cut their wages to $1

    How many Amercian and Canadian auto workers can cut their pay to $1 and still survive – an insult to the average worker!

    It is BETTER if the Unions try to make "the case".

    December 4, 2008 12:22 pm at 12:22 pm |
  19. Michael-Ventura,CA

    I agree with what Michael Moore said lsat night-Time for real change in the Big Three's operations- Bring in progressive, bright-minded people!

    December 4, 2008 12:23 pm at 12:23 pm |
  20. Dr.Mimi De La Cruz

    I HAVE A GREAT IDEA, IF I MUST SAY SO MYSELF.

    I PAY TAXES, A LOT OF TAXES. THIS IS A BILL FOR ME.

    AND I SAY TAKE THAT 34 BILLION DOLLARS & GIVE IT

    TO ALL THE WORKERS & TELL THEM TO GO HOME &

    REGISTER FOR SCHOOL THE NEXT DAY. THESE GREEDY

    DEGENERATES HAVE BEEN PLAYING PULL MY FINGER

    WHILE THE ENTIRE US AUTO INDUSTRY WAS PRODUCING

    DINOSAURS. THEY WERE GETTING THEIR MONEY. THEY DIDN'T

    CARE. NOW WE DON'T CARE. LET THESE CREEPS BANKRUPT.

    December 4, 2008 12:23 pm at 12:23 pm |
  21. Bill in Louisiana

    Simple. Let every Purple Heart recipient, or surviving spouse, and every surviving spouse and parent of a serviceperson, or police officer, or fireman, or other first responder who has been disabled or died in the line of duty, go to their local car dealership and pick out a car or truck. The dealership will then do the paperwork letting them have that car or truck, at invoice price, and get reimbursed by the Federal government in full, plus an administrative fee. Yes, a free vehicle for those who have given this country the priceless gift of their blood. The recipients are all deserving, the dealerships get their inventory reduced and a sale at the expense of the Federal government. Easy to document that the benefit goes to the right people – and they get a big thank you from a grateful nation, for their sacrifice for our freedom.

    December 4, 2008 12:24 pm at 12:24 pm |
  22. god bless the US

    So the big three gets their bailout,

    how come they still can't build a car that I want to drive?

    December 4, 2008 12:24 pm at 12:24 pm |
  23. Helene

    I want them to jog to Washington next time ...

    December 4, 2008 12:25 pm at 12:25 pm |
  24. Bob

    Karon I agree with you 100%. The Big Three are trying their hardest in these tough economic times they're cutting back as much as they can. I have a great idea to raise money for the Big 3. If they raffle off the Cars that they drove to Washington this could raise some decent money. I know I'd buy some chances

    December 4, 2008 12:25 pm at 12:25 pm |
  25. Simpliticus

    Investigate the 2.7L Mitsubishi engine in various Chrysler cars and you have unearthed a quagmire of deceit, bad management practices,and poor quality in car manufacturing! Apparently this engine had been known to have a badly flawed design which allowed water coolant to adversely come in contact with engine oil, inducing a sludge in the crank-case. This destroyed the engines of many of these cars and the company looked the other way. The many anecdotal statements of cars owners placed this deceit on the manufacturers who knew that this car engine would perform thusly and did nothing about it. Buyer beware!

    December 4, 2008 12:25 pm at 12:25 pm |
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