ABC News’ Jonathan Karl reports: The CEOs for the Big Three automakers –- General Motors, Ford and Chrysler -- and the head of the United Auto Workers union met with House Speaker Nancy Pelosi and the Democratic leadership this evening. Their message, apparently, was a blunt one: We need help and it can’t wait until next year.
"We need an infusion [of cash] now," a senior auto executive told me today.
Chrysler and GM are both scheduled to announce their earnings tomorrow, and the results are expected to be grim. Analysts have been speculating for months that one of Big Three was at risk of bankruptcy –- now some say it could happen before the end of the year.
Would more loans save them? That’s what the Big Three are asking for: Congress has already approved $25 billion in loans for developing fuel-efficient technology, but the money is tied up in red tape. Detroit wants that money freed up and another $25 billion in flexible credit to stay alive.
It’s a bailout that would be a tough sell in this lame-duck Congress, but the prospects of an automaker bankruptcy may scare lawmakers into action. The Big Three employ 240,000 people and support another 5 million jobs dependent on the auto industry. There are 14,000 dealerships in Congressional districts across the country, all hurting and many on the verge of bankruptcy.
There is precedent for a federal helping hand for the auto industry. In 1979, the federal government’s bailout of Chrysler cost $3.7 billion (when adjusted for inflation). While critics argue that that bailout ultimately weakened the auto industry, supporters point out that Chrysler ultimately repaid the loans with interest at a profit to the U.S. Treasury.
--With reports by ABC News' Dean Norland.