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. RealityKing

    Of course.., its the old ploy of begging for more than you need to get as much as you can. And the same thing will happen next time if we give them anything..

    December 4, 2008 12:26 pm at 12:26 pm |
  2. T'SAH from Virginia

    THIS IS ALL IT WOULD TAKE TO GET US OUT OF THIS MESS:

    Give EVERY legal USA citizen that filed taxes $1 MILLION dollars!!!!!!

    The Stipulatin: They MUST pay off ALL debts, including homes (if possible), student loans, etc. A credit check will be run on everyone that qualifies and debts will be paid before distribution.

    Whatever is left – the person does what they want!!! Most likely they will SHOP, buy CARS, INVEST, start BUSINESSES, RETIRE or even SAVE... The economy would BOOST itself!!!

    This will cost the taxpayers less than $300 Million. THIS IS A LOT LESS THAN THE $BILLIONS$ THAT IS BEING ASKED FOR.

    CASE AND POINT!!!

    December 4, 2008 12:27 pm at 12:27 pm |
  3. Colette

    For 3 decades, we have asked for RELIABLE and now more efficient cars. Japanese auto makers started years ago. The arrogance of Detroit is beyond comprehension. Now they want billions for bailing out the ridiculous demands of the unions and the incompetence of management – NO, NO, NO!

    In case I am not clear – NO!

    December 4, 2008 12:27 pm at 12:27 pm |
  4. Trang, Fremont CA

    I must say I am one ot those who usually don't buy American cars. Had one, and it broke down easily. Had Japanese cars, and they are low maintenance and last for years. People talked about mileage rate as their problem, but the main problem is American cars broke down easily, and people are reluctant to buy them. I don't what will it take to change that impression.

    December 4, 2008 12:28 pm at 12:28 pm |
  5. Tony, NY

    Add all this to the liberals 50 billion dollar State bailout coming soon and next years budget deficit is shaping up to be more than 1 trillion dollars! The highest $ amount and % of GDP ever!! Change we can believe in??

    December 4, 2008 12:29 pm at 12:29 pm |
  6. Chad

    The 3 CEO are carnivorous and must be booted. They are money hungry. If they can afford to get $1 for a year, they should also get rid of there holdings on the company stock as well. They have been producing automobiles which have greatly polluted the environment to a very great extent. They never ever thought about it but made miseries in customers life and pocket. Sorry to say they must never get the bailout funds, it is foolish and stupid to sy all workers will be out of jobs. Other manufacturing industry will hire them. The CEO of the UAW must be booted as well. They never thought about the customers but were only greedy to pocket money.

    December 4, 2008 12:30 pm at 12:30 pm |
  7. NEWSLINK

    Now that Ford and GM will sell their Jets. Shall we say that our Hearts bleeds for them. Now we will see the CEO's of the Jet Companies will be coming to Washington for their Hand-outs. And the American Taxpayer's can get no Help. With out us, there will be no need for the Auto makers.....

    December 4, 2008 12:31 pm at 12:31 pm |
  8. Sweetie

    The Big Three had their chance to improve for the better!

    They should not be bailed out!

    A failed company is a failed company, size doesn't matter!

    I don't buy the "Too Big to be allowed to fail" argument.

    We lost 209,000.00 Tax payers last month.....

    We can't afford these bailouts!

    December 4, 2008 12:31 pm at 12:31 pm |
  9. Jamie from San Francisco

    Mulally just told the American public all the things they did wrong. Fleming just told us about dealerships closing; who's fault is that? HIS! When you go into an interview and you tell a prospective employer about your egregious mistakes, should they hire you? NO! The automaker management teams and shareholders should sacrifice like all other American small business owners: give up your salaries and invest in your company if you believe in it. The problem isn't just the CEOs; they are protecting their shareholders. The CEOs are shareholders. You can't tell me that the thousands of shareholders can't figure this out on their own with their money. As a small business owner, I am struggling to keep it afloat with MY money, making decisions as quickly as possible to correct things, tapping experts for advice to make the best possible decisions. Why is no one asking them to step outside of their roles to look at the situation as an independent business owner? As a small business owner, you look at them and say "Bummer, you really screwed up so sacrifice and figure it out!"

    If anyone should get bailed out, it should be Unemployment because the money goes directly to the people. If the companies go under, Unemployment will cover them. The CEO's will get HUGE packages if the companies go under and they can rest on their million dollar laurels while the unemployed scrape by.

    NO AUTO INDUSTRY BAILOUT

    December 4, 2008 12:32 pm at 12:32 pm |
  10. sick n tired

    Hey GM just one question. Hows that HUMMER idea working out for ya!

    December 4, 2008 12:34 pm at 12:34 pm |
  11. TonyT

    Have some of you actually seen what the foreign automakers are building? Some of them are building just as many gas guzzlers (Toyota Tundra, Toyota Sequoia, Nissan Armada) as the domestics, and YES, sales are down for Honda, Toyota, and Nissan.

    If you think that Honda, Toyota, and Nissan will take up the slack, think again. They use some of the same suppliers as the Detroit 3. I don't believe that Honda, Toyota, and Nissan is willing to sacrifice their money to keep the suppliers going if the Detroit 3 fail.

    December 4, 2008 12:35 pm at 12:35 pm |
  12. karen raleigh

    There cars are too big and ugly–they need new designers who dont think that big is better- the streets look like battlefields with all the ugly cars(SUV's).

    December 4, 2008 12:36 pm at 12:36 pm |
  13. HD

    Watch out for Nardelli. He already took Home Depot for $230M and left them in a mess. Can't imagine the increase of bail out dollars is in anyway re-calculated to fill his pockets....hmmmm. Seems ironic that one of the prime examples of exhorbitant CEO salaries/pay-outs (Nardelli) that helped get us in this mess is now going to congress asking for money. Pretty hard to trust that cat.

    December 4, 2008 12:37 pm at 12:37 pm |
  14. Helen

    This people should not get a penny of the American taxpayers money. They need to take some of the millions they have earned in the past several years and bail out their companies. They are corrupt and greedy people

    December 4, 2008 12:37 pm at 12:37 pm |
  15. Richie

    Give them $25 gas money and send them home.

    December 4, 2008 12:39 pm at 12:39 pm |
  16. sandee in Portland

    For all you people that keep saying the car companies have fought against new technology for years, maybe you should read the article on why americans can't get their hands on small cars on Vehix.com. For years our car companies have been shipping fuel efficient small cars overseas but have not been allowed to sell them in our country, thanks to our government's desire to keep supporting the big oil companies. So, since our wonderful politicians have essentially created this disaster, they should approve the bailout and let these automobile makers sell these vehicles in the US.

    December 4, 2008 12:40 pm at 12:40 pm |
  17. Kim

    Give them money, and like MM said last night, we OWN their butts. Tell 'em their new job is to make fuel efficient electric cars and public transportation that reduce dependency on oil, foreign or otherwise. I don't always agree with MM, but I think he's right about this one.

    December 4, 2008 12:40 pm at 12:40 pm |
  18. Barbara in NC

    Why give them a loan to save their inefficient businesses? There are so many people out of work already that only wall street execs can afford to buy a car – and that's usually a Mercedes or a BMW.

    Good Job "W". You've shrunk our country with your stupid war and out-sourcing of our jobs.

    December 4, 2008 12:41 pm at 12:41 pm |
  19. Are we in Las Vegas?

    Has this free market country lost its mind? Bail out the auto industry Big 3? Why? All the traditional investors and lenders – Wall Street; the Baking Industry; and Private Equity will not lend a dime. They realize that these three companies are dinosaurs about to go bankrupt.

    December 4, 2008 12:42 pm at 12:42 pm |
  20. willow55

    Let's not forget that the big three are the largest private health care insurer in the U.S. The health care system, doctors, nurses, hospitals and their employees will be devastated if they are allowed to fail. Then the only solution will be a national health care system!
    wj RN

    December 4, 2008 12:42 pm at 12:42 pm |
  21. John Rogers

    I see on the news that the CEO's would only get a $1 salary, but no one is asking them about there bonus's or other incentives they get with there salary, I would say that some of the incentives would be in the millions of dollars, would they be willing to give that up also to get help from the citizens of the US

    December 4, 2008 12:44 pm at 12:44 pm |
  22. Chris

    The whole working for $1 thing has more to do with looking good in the media and public relations than it has to do with actually fixing detroit. Ditto with the whole private jet flap. There are much bigger problems here to fix. Let's talk about real issues with the big 3 and not these Palinesque issues.

    December 4, 2008 12:44 pm at 12:44 pm |
  23. Concerned Citizen

    The only use for any money extended to these auto makers should be administered by "another beaucracy" unfortunately. But the total focus of the money should be on ONE thing..... all electric technology. GM has already made the advance thinking and offered a prototype, called the VOLT. If you read of what it;s possibilities are,,,, a 40 mile range on all electric, would serve most soccer moms,,,, YET the most amazing thing is the backup gasoline generator, will give the car (on one tank of gasoline) an extended range of 700 miles........ Your present car has a range of say 200 miles on a tank of gas...... Now that is a difference that can actually lower demand for overall gasoline comsumption............ That any financial help,,,,,, MUST BE FOCUSED..... and all 3 auto makers, should collaberate on this technology,,,,,, so the end product will put all other efforts to shame.,,, This is just my opinion..... W.R.Fries, Sr. Los Angeles

    December 4, 2008 12:46 pm at 12:46 pm |
  24. Barbara in NC

    $10 billion a month for an unwarranted war (money in Haliburton/Cheney pockets). Guess who REALLY profited in the last few years.

    December 4, 2008 12:47 pm at 12:47 pm |
  25. beevee

    I think that the automakers should be bailed out as a one time help only. Otheriwise many people will be jobless and can create even worse economic crisis.

    December 4, 2008 12:48 pm at 12:48 pm |
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