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Congressional leaders appear no closer to finding an auto bailout deal with the White House, even as executives for the Big Three submitted plans (Chrysler, Ford and GM ) suggesting they need as much as $34 billion to stay afloat.
House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Harry Reid (D-Nev.) on Tuesday said they are committed to helping rescue the beleaguered auto industry, but they have yet to remove the stumbling blocks that kept them from moving forward in November.
The Bush administration and Democratic leaders are at a stalemate over where the money would come from, and some Republicans still believe letting the automakers file for bankruptcy is a better option than sending taxpayer dollars their way in a troubled economy.
Pelosi said bankruptcy should not be an option and sent lawmakers a letter Tuesday saying she would decide by Friday if another lame-duck session would be necessary next week.
“I believe that an intervention will happen either legislatively or by the administration,” said Pelosi. “I think it’s pretty clear that bankruptcy is not an option.”
Reid said Tuesday that he hoped to introduce at least a placeholder bill on Monday to give the Senate an opportunity to debate a package should lawmakers reach a compromise. “The 2.5 million workers involved in this deserve a vote,” Reid said. “I hope we can do something.”
The Big Three submitted their plans to Congress on Tuesday, with General Motors Corp., in the most precarious financial position, saying the company needed a combined $18 billion, including $12 billion in loans and a $6 billion line of credit. Chrysler LLC said in its plan that it needed $7 billion in loans by the end of the year.
Ford Motor Co., in the best financial position of the three, intends to carry out its business model of building a fleet of smaller and more fuel-efficient cars without federal assistance, but is seeking a $9 billion line of credit should economic conditions deteriorate.
Sen. Carl Levin (D-Mich.) said he believes that a package will come together, but he urged stronger support from President Bush and President-elect Obama.
“If this thing is going to happen next week, it’s going to happen with the support and assistance of the current president and the president-elect,” Levin said. “That’s critically important, and hopefully forthcoming and not just in the background.”
The Senate and House are set for hearings on Thursday and Friday, with lawmakers set to review the plans and consider whether to hold a session next week. The United Auto Workers union and leaders from the Big Three are reportedly set to meet on Wednesday in Detroit.
The companies submitted their plans the same day they reported dismal sales numbers for November, underscoring their tenuous financial state. GM reported that sales plummeted 41 percent, while Ford posted a 31 percent decline. Chrysler is expected to report similar numbers.
Foreign carmakers didn’t fare much better, with Honda Motor Co. and Toyota Motor Corp. both posting losses of more than 30 percent for the same month.
A variety of congressional proposals have been floated to extend aid to the industry, but it is unclear which path Democratic leadership will choose to take in the coming days. “I think there are a lot of votes for supporting the industry,” said one auto industry source, “but I don’t think there are as many for any one plan.”
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