Auto execs ask Congress for $25 billion lifeline

updated 7:22 p.m. ET Nov. 18, 2008

WASHINGTON - Detroit's Big Three automakers pleaded with Congress on Tuesday for a $25 billion lifeline to save their once-proud companies from collapse, warning of broader peril for the national economy as well.

"Our industry ... needs a bridge to span the financial chasm that has opened up before us," General Motors CEO Rick Wagoner told the Senate Banking Committee in prepared testimony. He blamed the industry's predicament not on failures by management but on the deepening global financial crisis.

But the new rescue plan appeared stalled on Capitol Hill, opposed by Republicans and the Bush administration who don't want to dip into the Treasury Department's $700 billion financial bailout program to come up with the $25 billion.

Sympathy for he industry was sparse.

Banking Committee Chairman Christopher Dodd, D-Conn., told Wagoner and leaders of Ford and Chrysler that the industry was "seeking treatment for wounds that were largely self-inflicted."

Still, he said, "Hundreds of thousands would lose their jobs" if the companies were allowed to collapse.

Sen. Mike Enzi, R-Wyo., complained that the larger financial crisis "is not the only reason why the domestic auto industry is in trouble."

He cited "inefficient production" and "costly labor agreements" that put the U.S. automakers at a disadvantage with foreign companies.

Wagoner said that despite some public perceptions that General Motors was not keeping pace with the times and technological changes, "We've moved aggressively in recent years to position GM for long-term success. And we were well on the road to turning our North American business around."

"What exposes us to failure now is the global financial crisis, which has severely restricted credit availability and reduced industry sales to the lowest per-capita level since World War II."

Failure of the auto industry "would be catastrophic," he said, resulting in three million jobs lost within the first year and "economic devastation (that) would far exceed the government support that our industry needs to weather the current crisis."

Congressional leaders worked behind the scenes in an effort to hammer out a compromise that could speed some aid to the automakers before year's end. But the outlook seemed poor.

"My sense is that nothing's going to happen this week," Sen. Bob Corker, R-Tenn., said at the opening of the hearing.

Earlier, Majority Leader Steny Hoyer said Congress might have to return in December — rather than adjourning for the year this week, as expected — to push through an auto bailout.

"Dealing with the automobile crisis is a pressing need. We are talking about a lot of people ... and a great consequence to our economy," said Hoyer, D-Md.

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