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. masgap

    Been watching CNN's coverage of the big 3 request for a loan.

    Question: if congress gives them the money and they fail and go into

    bankruptcy – do the people get the 34 billion back?

    If so I say give them a chance and if they fail – rescructure. Seems to

    me that it is a loan not a bailout and besides what about all the money

    we are spending in Irag. Other countries are supporting their auto industry. thanks

    December 4, 2008 02:05 pm at 2:05 pm |
  2. JONNY IN GEORGIA

    THE AUTO MAKERS GAVE THE US PEOPLE CRAP IN THE 1978 -2000. NOW THEY WANT A BAILOUT I SAY YES IF THEY WILL TAKE BACK ALL THE CRAP THEY STILL HAVE ON THE ROAD OH THE BIG THREE WILL GO DOWN AND SO WILL ALL THE AUTO MAKERS BECAUSE THEY ARE NOW MAKING NEWER AND BETTER CARS AND TRUCKS BUT WHO WILL BUY . WITH NO CREDIT CONGRESS SHOULD LEVEL WITH US AND GIVE A CLEAN SLATE TO ALL TAXPAYER ALSO GET RID OF THE FICA SCORE BECAUSE IT IS A BLOCK FOR SOME ONE WHO CAN BUY BUT HAS NO CREDIT.SOME DAY THERE WILL BE TOO MUCH CARS .THEN THE AUTO INDUSTRIES MUST DIE. THEY BETTER DIVEST .IN SOLAR PANEL. ETC GREEN ENERGY

    December 4, 2008 02:06 pm at 2:06 pm |
  3. Cathy in Florida

    F ound
    O n
    R oad
    D ead

    REMEMBER THAT ONE?!?!?!?

    December 4, 2008 02:06 pm at 2:06 pm |
  4. Peter (CA)

    Mike in Syracuse-

    I'm with you on this one. I would change #2 a bit. I don't think Big 3 execs have performed well enough to deserve compensation matching the Japanese. That should be taken into consideration. The Amercian workers definitely have to be part of the solution but their wages should also reflect the cost of living in Michigan vs the states that the other companies are in.

    December 4, 2008 02:11 pm at 2:11 pm |
  5. frank

    The three CEOs of the automaker will a $1 for they work is a little late. They should done that a longtime ago to save the company. This problem is the blame on both side ( The CEOs and The UAW Union ). They should working together to make the company to grow and make better products instead they fight each other. And also all the CEOs should take the blame for they greed and all they want quantity instead of quality. The three CEOs still have a dream on they head back 40 years ago. They should know the world is change and not the same as 40 years ago for doing business.

    December 4, 2008 02:11 pm at 2:11 pm |
  6. Uncle Fester

    Giving the Big Three more money to continue doing the same old thing is just delaying the inevitable. Giving them more money is not going to make you and me and the guy down the street want to (or able to) buy a car. I think that we should institute some kind of tax break for buyers that "buy American". If they are not selling the cars
    they are building, then what's the point?

    December 4, 2008 02:15 pm at 2:15 pm |
  7. Tom Mullaley

    Why is it so difficult for our Senate to understand that if the banks would loan money, the auto industry would not be asking for a LOAN. It appears as though some of the Senators want to break the union in the process. What kind of people are we putting into office?

    December 4, 2008 02:18 pm at 2:18 pm |
  8. Sacrafices

    If we as Americans bail out the Detroit three, major changes must occur. They need to retool the entire system from the top on down. That includes the factory worker who is paid $90,000.00 a year with benefits. Did you know if they get laid off they still get 95% of their pay? Plus bennies?

    No wonder people are buying $ 9,000.00 Hyundais as opposed to $30,000.00 dollar Ford or GM products.

    Buy American? Why, so the fat cats in the board rooms and the overpaid factory workers can keep their positions?

    Then they try to blackmail us by threatening a depression if the three companies go under.

    Fine. But BIG changes need to take place both in the companies and in the UAW. And if they don't implement those changes-jail terms for all of them.

    December 4, 2008 02:25 pm at 2:25 pm |
  9. slickingdom

    Bottom Line:

    Capitalism (along with deregulation) has failed this country. The CEO's
    of these corporations as well as Wall St. and Washington politicians
    should be ashamed of themselves. They've had their own agendas for
    years and now it's all come to a head and is ready to explode. Needless
    to say, the auto industry needs to stay afloat with a bridge loan. They are
    so closely related to the military and other industries that it would be a
    catastrophic not to sustain them. Placing strict regulations on them and
    making sure that they disclose where every cent gets spent would be
    a start. Making high quality products that are environmental-friendly
    and not over-pricing the consumer would help, and KEEP THE JOBS
    IN THE U.S. !!!!

    December 4, 2008 02:26 pm at 2:26 pm |
  10. Cathy in Florida

    Just to put the recent BAIL OUT chant ON LINE!!!

    The BAILOUT IS A SELL OUT

    GIVE THE MONEY TO THE FOOD BANKS

    December 4, 2008 02:31 pm at 2:31 pm |
  11. Give Me a Break

    i just tried to buy a card from a Ford dealership in my home town and was turned down after offering them $500.00 below the asking price....they said the only way I could get that deal is if I went through their financing at a higher interest rate....geez not too desparate if they will not sell a car for $500.00 under the asking price.

    December 4, 2008 02:38 pm at 2:38 pm |
  12. Dwayne Minnesota

    Just get rid of compound interest on cars and use simple interest. Car sales go up!!

    December 4, 2008 02:45 pm at 2:45 pm |
  13. Lizz

    Why can't Americans support local cars???
    If Americans choose to buy foreign cars, money will flow out of America.

    Consider that if local car manufacturers improve on their products, people should give them a chance to survive. Moreover, local cars are national pride.... if you are thinking of "Country First".

    December 4, 2008 02:47 pm at 2:47 pm |
  14. Barbara in NC

    Hey Give me a break –
    I went into a dealership almost 2 years ago and they offered me a deal with 17.5% financing. I had pre-arranged financing thru my credit union, so I wrote a check and didn't get a discount, but it is a Camry Hybrid, so the extra I've saved already has made up the difference. It's the wealthy trying to get wealthier. They overprice their cars and deny financing except at higher rates to get even more money for themselves.

    December 4, 2008 02:47 pm at 2:47 pm |
  15. Greed is not good

    Too much narrow-mindedness and selfish executives have run them into the ground. Yes $1 salary is not good enough...fire/replace all the board members and CEO's.

    Quit making SUV's that get 5mpg and take-up 2 parking spaces and start
    making 50 mpg cars that are sold in America! not ONLY in Europe.

    December 4, 2008 02:49 pm at 2:49 pm |
  16. brad hale from wisconsin

    ATTN ALI BELSHI!

    Here's my idea: Give everyone who wants a new car, a lease or grant/loan bailout, and let the money trickle up to GM, Ford, and Chrysler, That helps out everyone from end users, suppliers, UAW workers, and the credit industry! In addition, give those who buy a US made car a take break equal to the amount foriegn car manufacturers get from their governments!! PS I will run for president or congess if you need me.

    December 4, 2008 02:49 pm at 2:49 pm |
  17. Ken Sawyer

    The first thing that needs to be done is dump the union. You go broke in a business because you spend more than you make (union demands for one)or you have lousy products no one wants. While we are getting change why do we not demand the same system our crooked politicians set up for themselves. No Social Security to pay ,health care paid for for life and retirement if they stay out of jail for one term.

    December 4, 2008 02:54 pm at 2:54 pm |
  18. CHMARA

    So what if they drove hybrids to Washington? First impressions are the most lasting. Also, they all claim they will accept only $1 for their year's salary......DOES THAT INCLUDE BONUSES? The bonuses these 3 CEO's get are more than the salary. Yet all I've read is "salary". I still vote no, they haven't given substantial changes other than the salary and selling some of the jets. Where's the beef in that? Why not eliminate some of the lines of vehicles? For instance: make 2 or 3 pickups, not 12 different kinds, eliminate the Hummer, etc.

    December 4, 2008 02:57 pm at 2:57 pm |
  19. David

    So what happened to the public hearings, monthly detailed financial reporting and oversight over the $700 billion available to Wall street? Why isn't some of the money 'required' to be available at decent interest rates for consumers to purchase cars?? Where did the money that's been released go? Is it even still in our country? Nobody knows. So does anyone else see the automaker loan side show more of a big red ball being tossed to puppies to distract them?

    December 4, 2008 02:58 pm at 2:58 pm |
  20. Jayson in San Diego

    If it is true that millions of jobs are tied up in these companies, then save them, but tell those CEO's exactly what they are going to do from here on out....

    December 4, 2008 03:02 pm at 3:02 pm |
  21. Jeremy

    I agree Matt, it is all about accountability.

    December 4, 2008 03:03 pm at 3:03 pm |
  22. Allen

    What I would like to know is: Who is going to bail-out/hand-out the $90,000.00 of 401K money, that my wife and I have lost so far? Should I have a meeting with the car makers CEO's? Maybe they can bail us out! With their LARGE paychecks, that they probably get paid. I say let the car makers go BANKRUPT. Who cares........they should have thought about how they have been running these companies into the ground, for the past 20 plus years.

    December 4, 2008 03:04 pm at 3:04 pm |
  23. HouseDiva

    let the oil industry bail out the "big 3"

    CNN POST THIS!!!

    and quit monitoring my post!

    December 4, 2008 03:07 pm at 3:07 pm |
  24. dc but not from DC

    T'SAH from Virginia: "Give EVERY legal USA citizen that filed taxes $1 MILLION dollars!!!!!! ...This will cost the taxpayers less than $300 Million. THIS IS A LOT LESS THAN THE $BILLIONS$ THAT IS BEING ASKED FOR."

    I wish math was a priority in school...sadly, T'SAH from Virginia, you would give a million dollars each to only 300 people for it to equal $300 million.

    December 4, 2008 03:07 pm at 3:07 pm |
  25. Truth Speaker

    Dont give them anything. For decades they have jacked up the prices of cars. (FORD= Fixed Our Repaired Daily Cars) Then they parade on they're million dollar jets. Forget them.

    No get like us!

    December 4, 2008 03:15 pm at 3:15 pm |
1 2 3 4 5 6 7 8