The World Newser is World News' daily blog. Here, you'll find our staff's thoughts on the day's news and the way we build our broadcast. Plus, we'll share reports from our team of correspondents in the field, as well as producers behind-the-scenes.
RECENT POSTS
- Clem's Chronicles: Toyota Recall/Afghan Speech/State Dinner Crashers
- Charlie Gibson...On this Thanksgiving
- Quotes of the Day: 'It is my intention to finish the job'
- Start Your Shopping Engines
- The Hajj and Women's Dress
- Clem's Chronicles: Afghanistan/WH State Dinner/Holiday Travel
- Photos: White House State Dinners Through the Years
- Are We Becoming A Nation of Know-Nothings?
- Quotes of the Day: 'President Obama has the information he wants... to make his decision'
- Clem's Chronicles: Jobs/Afghanistan/Health Care Reform/Deficit
- Child Safety: Crib Recall and Other Recently Recalled Kids Products
- You Buying Less This Holiday?
WORLD NEWSER CATEGORIES
MONTHLY ARCHIVES
« Previous | Main | Next »
Dodd to Big Three Auto: The Votes Aren't There For Bailout
November 13, 2008 5:47 PM
ABC's Zach Wolf reports from Washington:
An architect of the original bailout bill said today Democrats lack the votes to pass bill giving auto companies a piece of the $700 billion bailout pie next week.
Sen. Chris Dodd to ABC News: "I want to help them if we can, but I'm not going to give anyone a blank check, so we're going to try and do something if we can next week. I don't think the votes are there. Candidly, I don't think we have the votes to get that done. With no big change between now and next Wednesday, I'm skeptical."
Even after January, Democrats will have to gain some Republican support in the Senate to pass a new rescue package for the auto makers.
And that is looking less likely. Another Republican aide said every time Congress passes a rescue package for a new industry, others will line up.
"Those are not illegitimate concerns obviously," said Dodd, "And you want to put conditions on any resources provided to an industry that hasn't managed itself very well, but its not going to serve any of our interests if a major automobile manufacturer goes out of business between now and Jan. 20th if we could step in and keep them vibrant, we might allow them to survive."
So, While the aim and focus of the TARP is elastic and evolving, it is looking less likely is that the auto industry will get in on the action.
Democrats in the House and Senate made clear earlier this week that they'd like to see some of the $700 billion go to help the troubled US auto industry, which directly an indirectly employs 1 in 10 US workers.
http://blogs.abcnews.com/politicalradar/2008/11/pelosi-to-seek.html
But Republicans today indicated they will be less willing to sign a big new check for Detroit than they were to prop up the financial industry earlier this year.
"People up here don't get it," fumed one Senior Republican aide off-camera. "Bailouts are less popular than Congress."
Be it a rescue or a bailout, any new loans to the auto industry would represent another huge outlay of taxpayer dollars and that is what frustrates Republicans, when there are no taxpayer guarantees the new money would keep the auto industry solvent.
"Spending billions of additional federal tax dollars with no promises to reform the root causes crippling automakers’ competitiveness around the world is neither fair to taxpayers nor sound fiscal policy," said House Republican Leader John Boehner in a statement today.
And if Republicans band against a bailout for the auto industry, Democrats admit there is no way it can pass this year. And it might be tough next year too.
House Financial Services Committee Chairman Barney Frank, D-Mass, an architect of the $700 billion rescue package, is said to be crafting a sub-rescue package for the auto industry, which would cut a check from that $700 billion to the prop up the US auto makers. Frank's committee will grill the CEOs for the Big Three American auto makers in a hearing next week.
But Congress authorized $25 billion in preferred loans to the auto industry earlier this Fall. The money is tied up in red tape and must be used to update facilities for production of more fuel efficient vehicles.
Rather than dipping into the $700 billion originally aimed at Wall Street and the Financial industry, Republicans would rather retool those loans to make them more immediately available and not constrict their use to creating more fuel efficient vehicles..
Mitch McConnell, the Republican leader in the Senate (and so the most powerful Republican in the land when President Bush is no longer President) has not rejected the idea of a bailout for the auto industry.
But his spokesman Don Stewart said today that Congress should consider how to use the billions in loans already thrown at the auto industry before allocating new money.
"Earlier this year, Congress acted in a bipartisan way to help the auto industry and protect jobs. The Congress passed and the President signed legislation authorizing $25 billion in low-interest loans to help American automakers retool their facilities to make the fuel-efficient cars of the future. It may be that there are changes that need to be made in order to expedite these low-interest loans. Other ideas have been floated and all will receive a review as we approach the Senate’s return next week," said Stewart.
Democrats realize that until January, when Barack Obama becomes President, they can't get anything done without the cooperation of Republicans first in the Senate and ultimately in the White House, where President Bush is no fan of another bailout/rescue.
November 13, 2008 in Economy | Permalink | Share | User Comments (150)
You can follow this conversation by subscribing to the comment feed for this post.
Maybe GM should be right sized and build a few models of highly reliable cars---oops that would be Honda and Toyota NO BAILOUT STOP the Madness
Posted by: Tasha | Nov 13, 2008 7:25:58 PM
Just say no to unions and no to any more bailouts. Paulson/Pelosi/Reid are driving our economy into the ground to the point we'll never recover. Maybe that's the point.
Posted by: just say no | Nov 13, 2008 7:30:13 PM
It would be one thing if the US automakers were experiencing a temporary economic anomoly, but their systemic problems go deeper and have been in the making for 30 years or more. Bailout money might keep them afloat temporarily, but I would be willing to bet we'd be right back here in 2-3 years.
Posted by: LongT | Nov 13, 2008 7:30:41 PM
Don't know why the media isn't reporting this but here's a list of the executive compensation for the big three automakers for 2007. Get ready to seethe in anger!
Remember, this is JUST for 2007 (one year!) and includes cash, stock and other bonuses:
GENERAL MOTORS
G.R. Wagoner: $14.4 MILLION
F. A. Henderson: $7.6 MILLION
R. A. Lutz: $6.8 MILLION
G. L. Cowger: $5.1 MILLION
T. G. Stephens: $4.9 MILLION
See details here: http://www.companypay.com/executive/compensation/general-motors-corp.asp?yr=2008
~~~~~
FORD
Alan Mulally $21.7 MILLION
Donat R. Leclair $11.7 MILLION
Mark Fields: $8.4 MILLION
Lewis W. K. Booth: $10.2 MILLION
Michael E. Bannister: $8.7 MILLION
See:
http://www.companypay.com/executive/compensation/ford-motor-co.asp?yr=2008
~~~~~
DAIMLER CHRYSLER
Dr. Dieter Zetsche: 5.1 MILLION
Gunther Fleig: 2.5 MILLION
Dr. Rudiger Grube: 2.5 MILLION
Andreas Renschler: 2.6 MILLION
Bodo Uebber: 2.7 MILLION
Dr. Thomas Weber: 2.5 MILLION
See page 169 of this:
http://www.daimler.com/Projects/c2c/channel/documents/1488194_DAI_2007_Annual_Report.pdf
~~~~~
And they want OUR money to bail them out? What a joke!!!
Please help spread the word!
Angela - a small business owner who knows how to live within my means and who would never expect taxpayers to bail me out of anything!
Posted by: Angela Hoy | Nov 13, 2008 7:35:12 PM
I don't need to contact my congressman. He voted against the $700 billion financial bailout. There's no way he would support one for the auto industry. I didn't vote for Senator Rep. Saxbee Chambliss because he voted for the $700 billion bailout, and now he's in a dead heat runoff with his democratic challenger. And although he's more of a slease, I'll let the cards fall where they may. I'm tired of voting for any of these guys.
Posted by: LongT | Nov 13, 2008 7:36:16 PM
No to bailing them out.. enough of the UAW with workers averaging 60k a year with a 9th Grade education. If we do.. then everybody else will be in line.. saying how about us too.
--------------------------------
From the Detroit Free-Press…
The Detroit City Council passed a resolution today calling for a $10-billion bailout for the city of Detroit.
Council President Pro Tem JoAnn Watson sponsored the resolution to use the money for public service employment, to fund mass transit plans and to place a moratorium on home foreclosures for two years.
----------------------
See what I mean? This madness has to stop now!
Posted by: Iceberg Slim | Nov 13, 2008 7:37:37 PM
oh well, who cares about 2 million jobs?
Posted by: Eric | Nov 13, 2008 7:38:13 PM
No matter who gets bailed out... the next Great Depression is on the horizon.. we need to just admit it and let it happen.
GWB will be back in Texas writing a book.. while we enter the next Stone Age.
Posted by: Iceberg Slim | Nov 13, 2008 7:43:16 PM
Dcitizen...couldn't agree with you about the incompetent men & women in Congress...the biggest incompetent person is PELOSI, next is REID & DODD, who is Chairman of the Senate Banking & Housing committee. I guess Dodd couldn't forsee the banking industry failing. He is just as crooked as all the CEO's of AIG, Goldman Sac, Bank of America, Fannie Mae & Freedie Mac.. We need California to vote out Pelosi and Connecticut to vote Dodd out. I guess this will upset PElosi & REID who demanded that Bush bails out the big 3 auto makers.
Posted by: 55Mariposa | Nov 13, 2008 7:43:58 PM
Unions are ultimately going to be responsible for the downfall of this country. Organized extortionists who are never happy with what they squeeze out of their employers. Why is GM in trouble.......because my suburban costs $50k. Why does my suburban cost $50k, because some guy who bolts the tires on has worked there 10 years and is paid $50hr plus a lifetime of pay after he retires. My friend has a thriving business pinstriping cars because Ford can't get the union to agree to production levels and quality standards. Bunch of thugs and idiots who just don't get it.
Posted by: Bryan T | Nov 13, 2008 7:57:05 PM
Think about the guys on the front lines, that have dedicated their lives to this company. The big wigs are the ones that have made bad decisions and they still take home million dollar bonus paychecks. You'd think that the bad performance over the years would have squashed that. GM has needed new leadership for years. Why don't they forgo their bonuses for a few years to save the company from this crisis.
Posted by: Dana | Nov 13, 2008 7:58:42 PM
Go ahead jerks, kill the American auto industry and you get what you deserve. To be taken over by a foreign power. America is a third world country anyway.
Posted by: bob | Nov 13, 2008 7:59:52 PM
the feds can spend another 8 trillion in the next 4 years without a sweat...
Posted by: fred | Nov 13, 2008 8:00:18 PM
A bailout = same auto makers limping along making the same gas guzzlers, whining they'd need even MORE money to modernize with new technology and better MPGs. This has been going on 30 years or more. Just bite the bullet. No bailout.
Posted by: Colorado Dem | Nov 13, 2008 8:00:45 PM
Just remember, the job you save may be your own.
Posted by: Walt | Nov 13, 2008 8:02:12 PM
hooray! bailing out the auto industry would have given new meaning to "spread the wealth around"--taking from the poor (me) to give to the wealthy (all UAW workers)!
Posted by: neehao | Nov 13, 2008 8:03:41 PM
Sure, don't bail out the auto industry, then when you go on unemployment then we can cancel your unemployment benefits too.
Posted by: w | Nov 13, 2008 8:07:39 PM
Sure, don't bail out the auto industry, then when you go on unemployment then we can cancel your unemployment benefits too.
Posted by: w | Nov 13, 2008 8:07:39 PM
--------------------------------
Even after bailing them out.. they will more than likely still go under.. so what difference does it make to worry about getting or not getting unemployment?
Posted by: Iceberg Slim | Nov 13, 2008 8:15:22 PM
I never understood the hate for unions... Shouldn't we be happy that some people are actually getting a living wage for hard work? These people bust their butts... most have missing fingers or other permanent disfigurement as a result of their jobs.. a lot of them die on the job... I've seen men fall into vats of acid... but, hey, they don't deserve a decent rate of pay. The union bashers all blame the unions, but never eek a word of complaint about senior management who get multi-million dollar contracts...
Toyota and other foreign manufacturers use union labor here, and yet you don't hear people praising unions as a result of that... maybe y'all should!
So, let GM fail... 2.5 million jobs isn't a big deal, is it? I mean, what 30% unemployment in Michigan is just grand for the economy! If you let GM go down, then pretty much the great depression II will come with it!
All GM needs is some cash to float them until February, at which time, they will have scaled down enough to pay the money back... it's not a giveaway, nor a handout, and it is going to be extremely necessary...
If GM goes into chapter 7 bankruptcy, we're talking about a huge shock to the economy that will last 2 decades at least... 2.5 million good paying jobs are hard to replace.... not to mention that the state of Michigan will be essentially destroyed... might as well just nuke it, it would be a more merciful end to a good state with good people than what you "kill GM" folks want to do...
Posted by: Mike | Nov 13, 2008 8:19:09 PM
One of the best reasons why Detroit automakers should not receive a bailout can be found in a General Motors "Jobs Bank" program that, bizarrely, pays employees not to work.
A beneficiary of that program was someone named Jerry Mellon, who worked for GM until his division merged with another in 2000 and he was no longer needed. Except for a brief period in 2001, Mellon received his full salary for not working, which reached $64,500 a year by 2006. Include benefits, and the annual cost to GM exceeds $100,000.
To earn his pay, Mellon was given the formidable task of showing up in a windowless shed, sitting at a table, and doing nothing for eight hours a day for six years, according to a profile in the Wall Street Journal. Jobs Bank employees have the option of attending classes teaching such important manufacturing skills as dealing blackjack and poker. Mellon spent part of his time reading Reader's Digest, learning how to play Trivial Pursuit, napping on a makeshift bed of chairs pushed together, or simply staring at the wall for hours at a time.
During those six years, Toyota surpassed GM as the world's largest car manufacturer, thanks to innovations like the fuel-sipping Prius. Nissan developed the GT-R, a technological marvel with a 0 to 60 time of 3.2 seconds and a lower sticker price than the Corvette ZR1. Honda kept its focus on smaller cars such as the Civic and Accord, and saw its sales continue to increase this summer while GM, Ford, and Chrysler have slid.
Posted by: Iceberg Slim | Nov 13, 2008 8:19:44 PM
Post a comment
