Dems to automakers: Prove your worth

WASHINGTON — Leading Democrats expect U.S. automakers will show Congress next month they are worth rescuing and capable of returning to global pre-eminence.

Skeptical Republicans said Sunday that Detroit's Big Three needed to persuade taxpayers that they deserve $25-billion.

Executives from Detroit's Big Three left Capitol Hill after a pair of disastrous hearings last week, under orders from Democratic leaders to provide a detailed accounting by Dec. 2 of their financial condition and short-term cash needs, as well as a plan for long-term viability.

Hearings are expected the week of Dec. 1. Lawmakers could consider legislation the following week.

"My expectation is that we are going to see something, that the auto companies are going to respond in a way that I think will give confidence to the Congress and to the American public that we need to assist these companies," said the House's second-ranking Democrat, Rep. Steny Hoyer of Maryland.

Sen. Charles Schumer, D-N.Y., said Congress cannot provide money without a plan.

But the House Republican leader, Rep. John Boehner of Ohio, was less certain the automakers would change enough minds by next month.

"I'm not sure that they will have a plan by early December, a real plan. And on behalf of the American taxpayers, they're not interested in investing money that — it's going to be really thrown away," Boehner said.

The top Republican on the Senate Banking, Housing and Urban Affairs Committee questioned whether $25-billion would be enough. "I don't believe $50-billion will be. I believe it will take several hundred billion, and still, they might not make it," said Sen. Richard Shelby, R-Ala., who favors bankruptcy reorganization if necessary.

President-elect Obama has advocated accelerating a $25-billion loan that Congress had authorized for automakers to retool and manufacture more energy-efficient cars, but congressional Democrats say that would undercut a major environmental effort and favor tapping last month's $700-billion rescue to financial institutions.

While Obama and top aides regularly pressed lawmakers last week to resolve the impasse, he did not advocate a specific solution, according to lawmakers.

On Sunday, Obama senior adviser David Axelrod warned the automakers that they will have to "retool and rationalize their industry for the future. And if they don't do that, then there's very little that taxpayers can do to help them."

U.S. automakers are struggling to stay afloat amid an economic meltdown, a sharp drop in sales and tight credit. General Motors Corp., Ford Motor Co., and Chrysler LLC went through nearly $18-billion in cash reserves in the last quarter, and GM and Chrysler have said they could collapse in weeks.

Dems to automakers: Prove your worth 11/23/08 [Last modified: Thursday, November 4, 2010 10:18am]

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