By John Crawley
WASHINGTON, Nov 20 (Reuters) - U.S. auto executives pitched
doom to Congress to win a bailout and left town empty handed.
Now they will have to make a U-turn and convince lawmakers
their industry has a prosperous future.
The chief executives of General Motors Corp, Chrysler LLC
and Ford Motor Co never recovered politically after landing in
Washington on their corporate jets with hats in hand.
A horrible week for the chiefs ended with their hopes for
an immediate bailout dashed and Senate Majority Leader Harry
Reid and House Speaker Nancy Pelosi chastising them for sending
mixed signals and not owning up to industry's problems.
"We want them to get their act together," Reid said.
Uncomfortable talking about business prospects and
financial details in public, Rick Wagoner of GM, Alan Mulally
of Ford and Bob Nardelli of Chrysler spent two days doing just
that in congressional hearings.
GM said it would need between $10 billion to $12 billion in
bailout money while Ford and Chrysler sought $7 billion each.
Their message centered on a belief that the industry's
outlook was so bleak that a collapse was possible. And because
they employ nearly 250,000 people and impact 1-in-10 jobs
nationally, insolvency of one or more of their companies would
send shockwaves through the broader economy, they said.
Wagoner told the House Finance Committee that he did not
like asking for money, but it was "reasonably probable" that
some part of the U.S. auto industry "will not survive" if their
request was rejected.
But Reid said at a news conference that GM, Ford and
Chrysler were unable to "convince the Congress or the American
people" that this "government bailout will be its last."
Pelosi was upset Detroit initially asked for congressional
support for a merger. But when "they came to see us," she said,
the message had changed to: "We need an infusion of cash."
The Democratic leadership, which supported a $25 billion
bailout proposal that was derailed by Republican objections on
Wednesday, wants Detroit now to demonstrate how the companies
plan to overcome problems and compete with leaner foreign
rivals.
"Until they show us the plan, we cannot show them the
money," Pelosi said.
All three companies responded with statements. GM promised
to "deliver a plan" that "shows them a viable General Motors."
Ford plans to change course as well. "We have a great plan,"
the company said. Chrysler said it was "prepared to meet the
"accountability and viability" requirements.
"One plan is what we're looking for," House Majority Leader
Steny Hoyer said of congressional expectations for the industry
in coming weeks.
The automakers pledged during their testimony to spend
bailout money on operations and invest in new fuel efficiency
technology - like better-performing gasoline engines, hybrids,
and new electric cars.
They also promised to keep any investments using government
cash in the United States.
GM, Ford and Chrysler had set broad restructuring plans
earlier in 2008 and have added to them in recent weeks in
response to the deepening downturn in sales.
The plans include paring capital spending and increasing
targets for salaried employment cost cuts in North America.
They also plan to delay some vehicle programs and scale back
production at several plants.
"With the agreement that we've made with the (United Auto
Workers) and our other productivity improvements, we can make
cars, trucks, and utilities in the United States. We can do it
profitably now," Mulally said this week.
Lawmakers gave few signs of what they want to see.
Senate Banking Committee Chairman Christopher Dodd said
some in Congress were interested in prepackaged bankruptcy --
where contracts with labor and suppliers and terms with lenders
are renegotiated up front.
But Pelosi rejected bankruptcy as an option for Detroit.
(Reporting by John Crawley; Additional reporting by Richard
Cowan in Washington, David Bailey in Detroit; Editing by Gary
Hill)
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