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. Al Mellen

    For all of you well meaning people in America. If you were not alive prior to December 7, 1941,,,,let this be a history lesson. When America was attacked on this date,,,,,,,when America went to war against both the Japanese and the Germans at the same time. If America on that date had no manufacturing,,,,,AUTOMOBILE PLANTS, More than likely the stars and stripes would not be flying over the white house today. America was able to defend itself because of our manufacturing base. Over-night the automobile plants were converted into war material plants,,,,,airplanes, tanks,,,,everything that it took to fight two wars. If the automobile plants are allowed to become history,,,,,there will be no facilities to once again build materials to keep America safe. The manufacturing in America has to continue,,,,,,,,if not , America may not survive another war.

    December 4, 2008 01:29 pm at 1:29 pm |
  2. PJ

    If you really want to make yourself ill today, be sure to watch the GM CEO Rick Wagoner announce his plan, including his $1 a year salary. Why wait until you are about to go bankrupt to come up with a plan to salvage what they have destroyed? He also announced that his plan would include to cut back the salaries of the executives currently managing the Company. Can you find a more noble executive?

    December 4, 2008 01:32 pm at 1:32 pm |
  3. dizizi31

    Dear Big (3)-

    Stop production of cars and trucks for the next (3) weeks. Dealers are overloaded, credit is not being given to buyers, since banks have tighter lending rules, and do what Michael Moore said...

    December 4, 2008 01:32 pm at 1:32 pm |
  4. Sean

    @Barbara....

    Try to stay on topic...this is not about the war or about "W" as much as you would like it to be.

    I have to say....the questioning done by Richard Shelby has to be about the worst I've seen. Did he even read the plans from the big 3? What an idiot. Nothing short of a complete restructuring is needed. It is time for them and their management to go. As for someone saying "get someone younger"....age has nothing to do with it. That's like saying get someone "blacker"...

    They need to start building better vehicles that people actually want to buy...I had a taurus during the 90's and can honestly say it was the worst vehicle I ever had. My Nissan has been painless.

    December 4, 2008 01:32 pm at 1:32 pm |
  5. Richard

    If they bail out the automakers I will never buy an american car again

    December 4, 2008 01:33 pm at 1:33 pm |
  6. Mike, Syracuse NY

    Sure, give them a bailout. Here are the rules:
    1. No bonuses for anyone until the companies are profitable and the bailout loan is fully repaid.
    2. All union contracts voided. Union line workers get same pay and benefit packages as their US Toyota and Honda worker counterparts, and the same for executive pay. If they don't like it, good luck finding another job.
    3. Fuel mileage for 2010 models must average 35 MPG, 40 MPG by 2012. All models must have a hybrid option.
    4. A windfall profits tax on oil companies will pay for tax rebates to anyone who buys an electric or hybrid car.
    5. Big 3 each have to introduce a production model electric car by 2010.
    6. Companies downsize workforce to match demand. Layoff benefits made the same as the rest of US industry, no better than one week pay for each year of service maximum.

    December 4, 2008 01:33 pm at 1:33 pm |
  7. Rush Lameduck

    Hey MATT, have you seen that money you gave the big banks you moron,you must have a personal ax to grind with the car makers or you work for Nissan,whats youe angle?

    December 4, 2008 01:35 pm at 1:35 pm |
  8. Chipster

    Other industries that are in trouble and could use a bailout: paper mills, textile mills, furniture manufacturers, rubber and plastic industries, food processors, leather products . . . . where does the line form for all of these industries that employee people and provide health benefits? How can we bail out three auto companies that plan to keep the managers who drove them into the ground and then turn down the rest of the nation's struggling industries? Where does it end?

    Should anyone be allowed to mismanage a company, waste billions of dollars on perks and frivolous expenses, and then expect to hold jobs hostage to get a bailout.? Of course, their first idea offered was to ask the workers for more concessions! Outrageous!

    December 4, 2008 01:35 pm at 1:35 pm |
  9. AEK

    Although I share many of the same concerns voiced here about the bailout of the auto industry, I'm more concerned for the men and women who punch a clock every day at the plants that will inevitably close without the bailout. These people had no voice in the design of the cars they produced and even with union wages and protections are not living the high life as some would suggest. Can we really afford to add them to the unemployment lines? For the past 12 years, I have intentionally been buying Chrysler vehicles, Jeep, Pacifica, 300 because I thought it was the right thing to do. I have NEVER had a problem with any of these vehicles, changed the oil, did regular maintenance, that's it.

    I do not think it's fair to paint a bailout of one of our valuable manufacturing industries with the same stroke as the AIG's and CitiCorp. Also, I'm curious, what benefit have those "infusions of capital" realized for the current economy? Where is the $700 billion?

    December 4, 2008 01:38 pm at 1:38 pm |
  10. Cody

    I have figured out a way for the auto workers to help themselves and their company. If the projected 250,000 workers all took a one dollar an hour pay cut that would create a $2 million a day savings which would in turn create a $520 million savings in one year period. This is to say that everyone works a standard 40 hours a week. I would most certainly lose $40 a week to save my job.

    December 4, 2008 01:43 pm at 1:43 pm |
  11. PastorP

    I just want to know, if we bail out the Big 3 like we're suppose to be doing for the Banks/Mortgage Companies, whose next in line to go to congress for our money?

    December 4, 2008 01:44 pm at 1:44 pm |
  12. chris

    If they want a bailout, maybe the super profitable oil companies should bail them out. Exxon is making around a $50 billion profit within the last four quarters. Their roller coaster stranglehold of fuel prices is partially to blame for this problem. When oil was low, the big 3 completely lacked any innovation or sustainable forethought. When oil is high, they scream "RESCUE ME!!". If this bailout goes through, there needs to be heavy incentives to ensure that they do not return to short-sightedness they have shown for the past 30-40 years.

    December 4, 2008 01:46 pm at 1:46 pm |
  13. no bailouts

    tell them to go back home with their tail between their legs. no bailout.

    December 4, 2008 01:51 pm at 1:51 pm |
  14. irish

    Cnn lets see if you post this comment of mine or let it sit in moderation for hours just to have it blown out completely.

    With that said

    The automakers should not get one red cent of our money. They knew whats been going on for years and years, but they never would put in jepardy there bonuses. As long as they were getting there fill of money, and lot's of it, they didn't care what was happening to the economy. They thought they could ride this gravy train forever. Guess what? The parties is over Big boys !!!!!.

    Doesn't matter how much we protest or scream and hollier that we are against this bailout. Our goverment is going to do what they want to do no matter how much the American people are against it. because folks, they do not represent us anymore, they represent there own interest and there crooked inside dealings. We do not have Goverment that we can trust to represent us, and that includes Obama. He is more then willing to go against the American publics voice in order to further his agenda. They act like we work for them not the other way around. And we, the American people sit back and let it happen. We do absolutely nothing about it. Maybe if we didn't pay our taxes come tax time or protested in the streets, maybe, just maybe they might start getting the big picture into focus that they work for us. Not the other way around.

    December 4, 2008 01:51 pm at 1:51 pm |
  15. Cathy in Florida

    Okay, NOW IT'S OUR TURN.

    The PEOPLE OF AMERICA would like to REQUEST $1,000,000 for EVERY MAN, WOMAN, and CHILD in the USA.

    That would stimulate the economy, pay off our mortgages, give the BANKS their money, enable us to BUY NEW VEHICLES, put our KIDS THROUGH COLLEGE, AND give us ENOUGH money for RETIREMENT.

    NO BAIL OUTS FOR AUTO, BANKS, INSURANCE OR ANYONE ELSE UNTIL YOU BAIL THE US CITIZENS OUT.

    OR.................WE QUIT PAYING THOSE TAXES!!!!!!!!!!

    December 4, 2008 01:54 pm at 1:54 pm |
  16. Barbara in NC

    WHAT? They asked for $25 B two weeks ago, then came up with $35 B this morning – now it's more like $60 to $70 B. If I budgeted that way I would have been dead for 40 years. KICK THEM OUT.

    They don't have a clue what they want or need. MORE MORE MORE MORE. NO NO NO NO. They heard there was money and they want their "unfair share". NO NO NO NO.

    December 4, 2008 01:55 pm at 1:55 pm |
  17. Mickie

    If they had been putting more money into producing those fuel efficient vehicles or even research to make other "green" vehicles, rather than putting huge bonuses in their pockets and paying their union workers 3+ times an hour what I make, I wouldn't mind bailing them out. When I make barely a livable wage, why should I add to my tax bill so that they can charge me an arm and a leg for any vehicle I may need in the future (and can't afford). As it is now, I drive a 1988 car (no, I am not kidding). So NO $$$ for CROOKS!

    December 4, 2008 01:56 pm at 1:56 pm |
  18. chris @ stl

    We should support the bridge loan request by big 3 as soon as possible. We are wasting a lot of time discussing unnecessary stuff in the congress (who cares how the CEOs got to DC, which cars they drove etc. ..) and making matters worse as time goes by …. C'mon. the IDIOTS in congress, decide soon!!! It is because of you guys (Congress), that the bridge loan request grew from 25b to 34b within 2 wks ….

    December 4, 2008 01:58 pm at 1:58 pm |
  19. Matt

    @ Rush Lameduck

    Angle? No angle. Simple pragmatics: precedent should be set that we will hold people accountable for driving companies into the ground while paying themselves enough to own 2 or 3 multi-million dollar homes, several cars, boats, etc. These are the people who put all those jobs at risk while securing themselves against the foreseeable collapse of the company they were running. It's time to set an example.

    December 4, 2008 01:58 pm at 1:58 pm |
  20. bsmith171

    nobody buys their product. it took them 35 years to get here.
    they have wrecked the companies.

    December 4, 2008 01:58 pm at 1:58 pm |
  21. marianna

    They want what? $34B now? What a nerve! They just wanted $25B a few weeks back. I guess, inflation $9B in a few weeks, say 4 weeks, makes it annual what? 400%

    Gimme a break! Let them fail flat on face !!!

    December 4, 2008 02:00 pm at 2:00 pm |
  22. Staunton, VA

    T'Sah from Virginia: I like your idea of giving the money to individuals instead and letting us pay off debts and spend, but you can't do math. There are 300 million Americans. If you want to spend $300 million or less, that's ONE DOLLAR for everyone, not $1,000,000. To give every American ten bucks would cost $3 billion. A hundred bucks would cost the $30 billion that automakers are asking for. The $700 billion bank bailout would have worked out to around $2,500 for every man, woman, and child in the country - larger families would have gotten a big benefit, but everyone would have gotten a nice chunk. To say that giving a million bucks to every "legal" American, and that it could cost $300 million or less, means that you must think there are only about 300 legal Americans in the entire country.

    December 4, 2008 02:00 pm at 2:00 pm |
  23. Barbara in NC

    After watching and listening to these snake oil salesmen with the golden parachutes, I'll NEVER buy FORD, GM, or ChRYSLER !!!!! It's the wealthy for the wealthy. Let the workers go to work for TOYOTA, HONDA, etc., for $35 to $40 per hour. That's a DARN GOOD living.

    December 4, 2008 02:00 pm at 2:00 pm |
  24. To the CEOs

    The bailout has to come at a cost. meaning, that the 3 Stooges and their top 12 yes men/woman must leave without compensation.
    Anyone can run a company in the ground. Give someone else a chance. Replacing the Board of Sissies wouldn't hurt either.

    December 4, 2008 02:01 pm at 2:01 pm |
  25. Simon

    Why should we pay to bailout such a backwards industry. Because of the unions there's people who get paid $90,000 a year to put 4 bolts in a single car A DAY!!!! The rest of the day they can't do anything. If that's something you want more of, then go ahead, But place blame where blame is due.

    December 4, 2008 02:04 pm at 2:04 pm |
1 2 3 4 5 6 7 8