Carmakers need change at the top
President-elect Barack Obama announced on Sunday to support a short-term rescue of the government of the nation of manufacturers, is linked to the restructuring of the industry, and the order accused the executives of the persistence of a "head in the sand approach "Long-festering problems.
In an appearance on the NBC "Meet the Press" and later at a news conference, Obama at one point suggested by some executives should lose their jobs.
A leading congressional Democrat, Senator Christopher Dodd of Connecticut, was more blunt. Rick Wagoner, the chief executive of General Motors Corp., "has to happen," Dodd said on CBS ’ "Face the Nation."
Democrats in Congress and the White House, Bush has reached an agreement in principle to provide emergency support for the U.S. automotive industry, congressional and industry sources said late on Friday.
The agreement will keep the majority of enterprises in difficulty from the bankruptcy court at least until the end of March.
Two officials familiar with the compromise talks told CNN that the purpose of work is $ 15 million to $ 17 billion in bridge loans.
While the money is less than $ 34 billion cars called on the testimony before Congress last week, the package is designed to keep its operation so that the new Congress and the administration of Obama will have at least A couple of months to draft and adopt a longer-term solution.
The break came Friday night, when House Speaker Nancy Pelosi, D-Calif., With the backing away from its opposition to the use of funds from a fuel efficiency research program, two members of Congress told the CNN.
Congressional Republicans and President Bush has supported the idea of using the $ 25 billion approved for the fund.
Democrat leaders had been arguing that the Treasury Department to help vehicle manufacturers with the money from the $ 700 billion set aside for banks and companies on Wall Street. The troubled Alleviation Program assets, or canvas, was created in October.
A congressional source noted that the agreement does not represent a final bill.
Pelosi said in a statement that assistance should be linked to restructuring and come with protections for taxpayers.
An auto-industry source told CNNMoney.com that it was too early to say who is a firm deal, but that the change of heart by Pelosi on the origin of the funds for a ransom was an important step towards an agreement.
In another sign of improving the chances of rescue, both Pelosi and Majority Leader Harry Reid of the Senate, D-Sin., Issued statements saying that it expects to call the lame-duck Congress back into a period of meetings to vote on aid to the automotive industry.
As recently as Thursday or Pelosi or Reid would commit to holding the vote by the car manufacturers say they need in the next two weeks.
However, the leaders decided Friday to a plan for the vote because the Government grim employment report, showing that the economy lost 533,000 jobs in November, and the best reception of the cars’ CEOs received Capitol Hill in the hearings on Thursday and Friday.
"Today’s announcement of big job losses and the results of the congressional hearings over the last two days make clear that Congress must work on a bipartisan basis to provide short-term and limited assistance to the industry car while it undertakes a major restructuring, "said Pelosi.
Until the wire
General Motors, the largest automaker, has warned it will run out of money to operate before the end of the year without federal assistance. And Chrysler LLC has indicated that it is also about the lack of money and not get through the first quarter of the year, without help.
GM and Chrysler have argued that consumers are reluctant to buy cars from a bankrupt car manufacturer. As a result, they say, bankruptcy would require submissions to leave the business and liquidate its assets.
While the industry requested $ 34 billion in federal loan this week from Congress to help them weather the current liquidity crisis triggered by the worst car sales in 26 years its senior executives indicated in testimony Friday that could work with the smallest amount in order to drive through March.
GM Chief Executive Rick Wagoner said the company needs U.S. $ 4 billion by the end of the year to avoid bankruptcy, another $ 4 billion in January and an additional $ 2 million at the end of March. Overall, GM is seeking up to U.S. $ 18 million to get to 2010, when the cost savings from 2007 an employment contract will start in.
Chrysler CEO Robert Nardelli said that his company needs $ 4 million early next year to a total of $ 7 billion that is asking from Congress.
Ford, the third largest U.S. automaker, has much more cash on hand and believes that it does not need federal loans to survive. However, it is asking for access to a high of $ 9 billion in loans as a "support" if business conditions are worse than the executives of its forecast of next year.
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