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Tide turns on carmakers

Sen. Ted Kennedy and his wife, Vicki, arrive at the Senate Russell Office Building on Monday. Kennedy is battling a malignant brain tumor.

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Sen. Ted Kennedy and his wife, Vicki, arrive at the Senate Russell Office Building on Monday. Kennedy is battling a malignant brain tumor.

WASHINGTON — Prospects dimmed Monday for a $25-billion bailout that U.S. automakers say they desperately need to get through a bleak December.

Though all sides agree that Detroit's Big Three carmakers are in peril, battered by the economic meltdown that has choked sales and frozen loans, the White House and congressional Democrats are headed for stalemate over how much government money should go toward helping them.

As the leaders of the three Detroit auto companies and the United Automobile Workers union come to Washington to make their case for a federal bailout, they are flying into stiff headwinds of public opinion, a remarkable shift for an industry that has long wielded considerable clout in Washington.

The congressional debate comes as the financial situation for General Motors, Ford and Chrysler grows more precarious. GM has said it could run out of cash by year's end without government aid.

A Senate auto bailout bill unveiled Monday noted that 355,000 U.S. workers are directly employed by the auto industry, and an additional 4.5-million work in related industries. That doesn't count the 1-million retirees, spouses and dependents who rely on the companies for retirement and health care benefits.

The Senate Democrats' measure would carve out a portion of the Wall Street bailout money to pay for loans to U.S. automakers and their domestic suppliers, but aides in both parties and lobbyists tracking the plan privately acknowledge they are far short of the votes to pass it.

Support has dwindled for many reasons, and most politicians, including President-elect Obama, are coming around to the idea that a bailout without a strong dose of restructuring would be useless.

Analysts say several strategic missteps have hurt Detroit's standing. For example, the carmakers fought hard in recent years against two congressional efforts to raise fuel economy standards, at a time when Americans were struggling with more expensive gasoline and had become more environmentally conscious.

Some congressional support has also dwindled because the automakers closed plants in states including Alabama, Georgia, Louisiana and Delaware, and consolidated their operations closer to home. Meanwhile, foreign auto companies built plants across the South, where those lawmakers — like Sen. Richard Shelby, R-Ala. — are amenable to the foreign car companies.

Michael Useem, professor of management at the Wharton School of the University of Pennsylvania, said the lack of leadership from within the Detroit companies hurt their effort as well.

One of the UAW's most prized accomplishments — winning income security for its laid-off members — is not helping the union as it argues for money to help protect its workers at a time when employees across other industries are facing layoffs.

The program, called the Jobs Bank at GM, provided nearly full pay for laid-off workers while they waited for new jobs. A new version of it is less generous but has left an impression in the public imagination of a place where workers sit around getting paid for doing nothing.

"In good times, the public can tolerate the Jobs Bank," said Gary Chaison, professor of industrial relations at Clark University in Worcester, Mass. "But in bad times, the public has very little patience for that."

The Bush administration has steadfastly opposed giving automakers a chunk of the $700-million banking bailout. While Obama has said the auto industry should get assistance, "I think that it can't be a blank check," he said Sunday on 60 Minutes.

Michigan's congressional delegation, led by Sen. Carl Levin and Rep. John Dingell, the industry's longtime champion, have been left to plead hardest for federal help.

"There's not a bank in this country that would lend a dollar to these companies," Shelby said Sunday on Meet the Press.

House Speaker Nancy Pelosi, D-Calif., has held off scheduling a vote on an auto bailout bill until it becomes clear whether such a measure can pass the Senate, where it would need a 60-vote supermajority to advance.

new, old faces cross on the hill

Kennedy pushes health care: Sen. Edward Kennedy, D-Mass., made his second appearance on Capitol Hill since he began treatment for a brain tumor in June and said he would advance a bill early next year calling for universal health care, a career-long goal for him. "The president-elect has indicated that this is going to be a priority, and I certainly hope it will." His brief appearance Monday followed a surprise return in July to vote on a Medicare bill.

Getting acquainted: Outgoing and incoming Washington crossed paths on Capitol Hill on Monday, as lawmakers-to-be trod the same pillared hallways as the members of Congress they defeated. Senate Majority Leader Harry Reid appeared briefly with six incoming Democrats — Mark Warner of Virginia, Kay Hagan of North Carolina, Mark Udall of Colorado, his cousin Tom of New Mexico, Jeanne Shaheen of New Hampshire and Jeff Merkley of Oregon — and Senate GOP leader Mitch McConnell met with Jim Risch of Idaho and Mike Johanns of Nebraska, who replace retiring senators. Across the Capitol, about 50 House freshmen looked to the future as well with an orientation session.

Hand slap for Lieberman: Sen. Joe Lieberman, I-Conn., appeared likely to hold onto his chairmanship of the Senate Homeland Security Committee as he meets today with Democratic colleagues unhappy over his support for GOP presidential nominee John McCain. It appeared Lieberman would receive a lesser sanction, such as losing a subcommittee chairmanship.

Tide turns on carmakers 11/17/08 [Last modified: Thursday, November 4, 2010 9:55am]
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