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. Joa

    So they are willing to work for $1??? Who are they think they are playing?? They will not be able to live on a dollar a year. America don't fall for that!!!

    December 4, 2008 12:49 pm at 12:49 pm |
  2. Brian G, Sugar Land, TX

    Phonies. All three are phonies who don't deserve a dime after keeping us in high gas consuming autos all these years. They chose their business model, now let them choke on it!

    December 4, 2008 12:49 pm at 12:49 pm |
  3. tulsa, ok

    Don't give them a dime I'm sick of bailing out company after company with taxpayers’ money but never the taxpayer.

    December 4, 2008 12:50 pm at 12:50 pm |
  4. Matt

    @ Ken

    Short answer: It's called ACCOUNTABILITY. It's time for us to start living like that word has meaning in our society. I may be a liberal, but my heart stops bleeding when it comes to ultra-rich jerkoffs continuing to make themselves ultra-rich while everyone suffers and a company-wide collapse is foreseeable. You can lay down and roll over hoping they'll scratch your belly if you want, but I think it's time we bite.

    December 4, 2008 12:51 pm at 12:51 pm |
  5. Bruce

    give the money to us, the taxpayers and amybe we will buy one for thier cars...

    December 4, 2008 12:52 pm at 12:52 pm |
  6. Cheryl

    The auto companies gave the consumer what they wanted – the mindset in this country has been bigger is better – supersize your meal, your house, your car. Foreign auto makers who have facilities in the US are SUBSIDIZED by their country and their profits do not stay in the US. And we also need to ask our government why we have to pay tariffs to get our manufactured goods into other countries but no other countries pay any type of tax to flood our markets. How about FAIR TRADE instead of FREE trade? If these companies go bankrupt, how is the government going to recoup the lost revenue from the taxes they pay?

    December 4, 2008 12:52 pm at 12:52 pm |
  7. bridgette

    You know what amazes me is that I don't think the average American realizes how many businesses are tied into the auto industry. 3 million jobs is a low estimation. If you are asking for a loan it is not a bail out. A bail out is what we did for the financial industry and how's that working out. It's not. No one has absolutly where that money is. And as hard as they are on the automakers they should be just as hard on them. Like for startes where did $350 billion dollars go. It is absolutly ridiculous.

    I sold cars for years and it is everyday working people like myself and countless others who will pay for this. Yes speaking from the inside I do believe that things should change drastically, but, I don't think millions of people should loose their jobs because Republicans don't like unions. That is what this boils down to.

    December 4, 2008 12:53 pm at 12:53 pm |
  8. SpookyElectric

    They should file bankruptcy. I will be writing my government representatives to tell them that they should authorize one dime for them.

    December 4, 2008 12:53 pm at 12:53 pm |
  9. Tim

    Anyone else find that it is ironic that in an article that focuses on the US big 3 that the picture is of Ford vehicles not available in the US? That is a lot full of European Ford models.

    December 4, 2008 12:57 pm at 12:57 pm |
  10. Victor of MI

    I'm MI so I know how much we are dependent on the auto industry, but I absolutely DO NOT support a bailout. These guys along with the UAW need to experience bankruptcy.

    Maybe from their ashes, a new, better entity will arise. 34billion dollars won't save a sinking titanic that is the big3. They have no one to blame but themselves and the UAW.

    I hope this is a lesson for ALL UNIONS. Maybe people will start buying American cars again when some newer companies take over. Lets face it, American cars have gone off the cliff for many years now.

    December 4, 2008 12:57 pm at 12:57 pm |
  11. Sylvia

    Why can't the oil companies loan the car companies the money. When gas was $4.00 + per gallon, the oil companies made billions. They have a vested interest in seeing the auto manufacturers stay in business. Perfect match I'd say.

    December 4, 2008 12:57 pm at 12:57 pm |
  12. Brian from Fort Mill, SC

    I think I know the perfect punishment for these CEO's. Not only would they have to work for a salary of $1 per year, but they have to trade in their limos for a car that they produce.

    In other words, the CEO of GM should drive a Chevy Imala, the CEO of Ford should drive a Taurus, and the CEO of Chrysler should drive a Caravan..

    Then and only then will they finally understand why nobody wants to buy their crap!!

    December 4, 2008 01:02 pm at 1:02 pm |
  13. Evelyn Mills

    We bailed out the thugs on Wall Street with no strings attached.This was a big mistake .However I can see bailing out the Big Three only if they are willing to bring back the jobs they have outsouced overseas.
    No more plants in China, Mexico and other countries.
    I do believe if America were to have Universal Health Care it would help our business's be more competitive in the world market
    We do need to end the greed at the top .

    December 4, 2008 01:04 pm at 1:04 pm |
  14. obama-mama

    I hate to see Rich folks beg.....

    December 4, 2008 01:04 pm at 1:04 pm |
  15. Matt

    And as far as bailout money goes, the only thing they should be allowed to use it for is R&D for alternative energy vehicles. If people want to trade up cars every 2-3 years because Stepford Wife #9 has a nicer land-boat in which to drive the kids to soccer practice and it's unacceptable to drive that still-running Dodge Caravan 3 blocks to the field instead of walking, then so be it. Let them buy foregin cars for now. At least forcing the R&D will ensure that the Big 3 wind up being leaders (whether they like it or not) in what truly needs to happen to help save our economy.

    December 4, 2008 01:04 pm at 1:04 pm |
  16. Almost the end of THE error!

    NO NO NO NO I can't believe they are even thinkin of bailing these 3 out! We have been demanding them for years to build better cars. They said NO! So now its our turn to say NO! This money should be used for better things. A new company can come along, buy them out, and start producing better cars. Its time for CHANGE!! I would rather see the Government give loans to new companies for start up costs.

    December 4, 2008 01:04 pm at 1:04 pm |
  17. Spirit of America

    $700 billion bailout to Wall Street with no concessions made; no plan demanded; no strings attached; and no oversight. But not even a small fraction of that as a loan to save some 3 million American jobs on Main Street even after major concessions. No one dares call that treason. I do.

    December 4, 2008 01:05 pm at 1:05 pm |
  18. DebM, Allentown, PA

    Umm, T'sah, I hate to question your math, but are there only 300 legal US citizens?

    If you give them each $1 million, you're looking at $300 million. You may want to doublecheck your figures.

    There are actually about 230 million adults. I figured with the last bailout at $700 billion, that would work out to about $3,000 per US adult. Not enough to provide the stimulation we need.

    December 4, 2008 01:06 pm at 1:06 pm |
  19. Cheri

    If we can give the banks money why can't we give the auto makers money?AIG spent the money on parties and trips and they gave them more.The blue collar workers always get the shaft.If the auto companies go under millions will be without a job.I don't think the US economy can deal with this.

    December 4, 2008 01:12 pm at 1:12 pm |
  20. Stacy from Loudoun County VA

    One buck a year, they are overpaid.

    December 4, 2008 01:15 pm at 1:15 pm |
  21. Matt in Dallas

    Barbara in NC,

    You must be a miserable person to be around. Every post I see with your name on it is blaming this person or that person for the current situation. Shouldn't some blame go towards the auto manufacturers? I mean I know President Bush is the devil and all but he's not responsible for everything bad. Is he? I dare you to try and say one nice thing about President Bush and what he has done in the last 8 years. Can you find enough warmth in that heart of you to do that? Come on, just try it once. It might make you feel better.

    Matt

    December 4, 2008 01:15 pm at 1:15 pm |
  22. Mogu

    Why does not make the next version of the Hummer – H4, the GZ-GZLR version. That should certainly fix GM's problems, no?

    December 4, 2008 01:16 pm at 1:16 pm |
  23. Mogu

    Why does GM not make the next version of the Hummer – H4, the GZ-GZLR version. That should certainly fix GM's problems, no?

    December 4, 2008 01:24 pm at 1:24 pm |
  24. Adam Smith TX, USA

    I don't think we can count on GM and Ford to really sell their private jets

    Its a little too comfortable to fly than drive as they suggest all their customers do when they market their cars!!!!

    These BRIDGE LOANS not bail out should have stringent guarantees and conditions like those accepted by Lee Iococa of Chrysler in his one Billion loan that he refunded with interest.

    December 4, 2008 01:25 pm at 1:25 pm |
  25. Sue T

    They will be bailed out. no matter what you and I think......why all these hearings........they will bail them out anyway......so do it and get it over........The $700 billion should have been given to the american people that pay taxes so that we could have stimulated the economy.....but we won't get any of it and if we do we will be the last ones to get anything.......I don't like the idea of them being bailed out either but I don't want to see all these people out of work, no health coverage, it will effect not just the auto industry but the lay offs and business that will be effected are going to be enormous

    December 4, 2008 01:25 pm at 1:25 pm |
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