(adds hearing, Dodd, Reid comments)
By John Crawley
WASHINGTON, Nov 18 (Reuters) - A proposed $25 billion
bailout of U.S. automakers failed to gain traction on Tuesday
in the Senate despite pleas from industry that failure to act
could result in wholesale liquidation.
There is strong sentiment to help General Motors Corp, Ford
Motor Co, and Chrysler LLC, with loans, but doubts surfaced
about the amount requested, whether Detroit companies would be
healthy enough to repay it, and a general resistance to
spending yet more taxpayer money on corporate rescues.
"We're not there yet," Christopher Dodd of Connecticut, the
Banking Committee chairman said after a four-hour hearing on
the auto bailout. "Trying to jam something through would be a
mistake."
Dodd and his colleagues grilled Rick Wagoner of GM, Alan
Mulally of Ford and Robert Nardelli of Chrysler, who said he
would work for $1 if it would help sway reluctant lawmakers to
sign off on a bailout.
Nardelli said Chrysler explored bankruptcy and other
options before appealing to Washington. He said Chrysler was
was fragile, while Wagoner warned of a "catastrophic" shock to
the U.S. economy if insolvency struck the industry.
Ron Gettelfinger, United Auto Workers president, said
inaction by Congress could result in GM, Ford and Chrysler
liquidating. The three companies employ nearly 250,000 people
and affect millions of other workers in related industries.
The executives did not balk at proposed bailout conditions,
including Wagoner, who said GM would agree to the government
taking an equity stake. GM said it needs between $10 billion
and $12 billion in bailout cash, while Chrysler and Ford said
about $7 billion each would help them.
But executive assurances of loan repayment, transparency,
exclusively investing bailout funds in the United States, and
promising to pursue fuel efficiency, did not appear to move
their allies in the Senate any closer to success.
Barring an unexpected breakthrough in talks between
Democrats and Republicans, who favor another option also backed
by the White House, no votes are expected on the bailout before
Thursday or Friday, Senate aides said.
Senate Democrats are still short of the 60 votes needed in
to overcome procedural hurdles, aides and lawmakers said on
Tuesday.
Reid was hopeful a deal could be reached with wavering
lawmakers but raised the possibility the bailout plan would not
succeed during the brief, post-election session.
"I would hope that the White House would do the right thing
after we leave here, if we're unable to get anything done,"
Reid said.
Although they believe the Treasury Department already has
the authority to help, Democrats have proposed amending the
agency's $700 billion rescue fund for financial services
companies to include auto companies.
The White House adamantly opposes that approach, saying the
fund is for businesses central to the financial system and for
unfreezing credit markets.
The administration, and key Republicans like Senate
Minority Leader Mitch McConnell, support amending another law -
one passed in September extending $25 billion in Energy
Department loans to Detroit to help it retool factories and
make more fuel efficient vehicles.
McConnell said there was some Democratic support for that
approach.
Senate bailout proponents do not want to amend the
retooling law, saying it is crucial for helping GM, Ford and
Chrysler compete once they get back on their feet financially.
(Reporting by Donna Smith, Tabassum Zakaria, Thomas Ferraro,
John Poirier, and Kevin Drawbaugh; editing by John Wallace and
Carol Bishopric)
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