Wednesday
Nov192008
Big three automakers bid for bailout
Representatives from the flailing Big Three automakers appeared before the Senate Banking, Housing and Urban Affairs Committee Tuesday to make their case for receiving a 25 billion dollar bailout.
Alan Mulally, president and CEO of the Ford Motor Company; Robert Nardelli, chairman and CEO of Chrysler LLC, and Richard Wagoner Jr., chairman and CEO of General Motors explained that if they were to fail, there would be millions of lost jobs across the entire spectrum of the automobile industry, from those in manufacturing positions to those who work in dealerships.
While the committee members’ opinions about the bailout were mixed, the sense of cautious doubt seemed unanimous.
“Let me say what I have said previously: I support efforts to assist the industry. Not because their leaders necessarily deserve taxpayer’s help. On the contrary, they deserve no more help than do the leaders of the financial companies that created the subprime mortgage mess that has exploded into a global financial crisis,” said Chairman Chris Dodd (D-Conn.)
Dodd asserted that the blame for the Big Three’s dilemma rested on the CEO’s themselves.
“None of us relishes being here today to consider these prospects. That goes for our company and labor witnesses. Their discomfort in coming to the Congress with hat in hand is only exceeded by the fact that they are seeking treatment for wounds that I believe are to a large extent self-inflected,” said Dodd.
However, the Big Three disagreed that they should be held responsible, with the Ford and GM CEOs saying that their companies were headed towards profits until the credit crisis hit. The result was that the consumers ability to buy cars was severely impacted and gains quickly dropped.
The automakers also rejected the notion that they have not been innovative and have been refusing to make needed changes. All three companies have begun the creation of hybrid vehicles and have made attempts to reach more effective labor costs.
The CEOs flatly disagreed with suggestions that they declare Chapter 11, citing that there would be no real benefit since the restructuring that would come with a bankruptcy declaration was already being attempted. This would be coupled with the companies supposed inability to maintain liquidity on remaining products, since they contended that few consumers would purchase a product from a folding company. Mulally also stated that Ford still owed wages to workers that would be lost if the company declared Chapter 11.
An additional witness, Peter Morici; economist and professor at the University of Maryland School of Business, disagreed and said that Chapter 11 was a viable option.
“If Chapter 11 is put off, the successors to GM, Ford and Chrysler that emerge from a bankruptcy reorganization process will be smaller and support fewer jobs than if these companies endure this difficult transition in 2009. More jobs can be saved among GM, Ford and Chrysler and their suppliers if bankruptcy reorganization is endured now than in the future.”
Alan Mulally, president and CEO of the Ford Motor Company; Robert Nardelli, chairman and CEO of Chrysler LLC, and Richard Wagoner Jr., chairman and CEO of General Motors explained that if they were to fail, there would be millions of lost jobs across the entire spectrum of the automobile industry, from those in manufacturing positions to those who work in dealerships.
While the committee members’ opinions about the bailout were mixed, the sense of cautious doubt seemed unanimous.
“Let me say what I have said previously: I support efforts to assist the industry. Not because their leaders necessarily deserve taxpayer’s help. On the contrary, they deserve no more help than do the leaders of the financial companies that created the subprime mortgage mess that has exploded into a global financial crisis,” said Chairman Chris Dodd (D-Conn.)
Dodd asserted that the blame for the Big Three’s dilemma rested on the CEO’s themselves.
“None of us relishes being here today to consider these prospects. That goes for our company and labor witnesses. Their discomfort in coming to the Congress with hat in hand is only exceeded by the fact that they are seeking treatment for wounds that I believe are to a large extent self-inflected,” said Dodd.
However, the Big Three disagreed that they should be held responsible, with the Ford and GM CEOs saying that their companies were headed towards profits until the credit crisis hit. The result was that the consumers ability to buy cars was severely impacted and gains quickly dropped.
The automakers also rejected the notion that they have not been innovative and have been refusing to make needed changes. All three companies have begun the creation of hybrid vehicles and have made attempts to reach more effective labor costs.
The CEOs flatly disagreed with suggestions that they declare Chapter 11, citing that there would be no real benefit since the restructuring that would come with a bankruptcy declaration was already being attempted. This would be coupled with the companies supposed inability to maintain liquidity on remaining products, since they contended that few consumers would purchase a product from a folding company. Mulally also stated that Ford still owed wages to workers that would be lost if the company declared Chapter 11.
An additional witness, Peter Morici; economist and professor at the University of Maryland School of Business, disagreed and said that Chapter 11 was a viable option.
“If Chapter 11 is put off, the successors to GM, Ford and Chrysler that emerge from a bankruptcy reorganization process will be smaller and support fewer jobs than if these companies endure this difficult transition in 2009. More jobs can be saved among GM, Ford and Chrysler and their suppliers if bankruptcy reorganization is endured now than in the future.”
tagged 
Automakers, Big Three, Chrysler, GM, ford in Congress, News/Commentary
Automakers, Big Three, Chrysler, GM, ford in Congress, News/Commentary
Obama Defends Auto Bailout During Visit To Chicago Ford Plant
By Sarah Mamula - Talk Radio News Service
“America’s automakers have added 55,000 jobs since last June,” said President Barack Obama at a Ford facility on Thursday. “And over the next two months, this plant will bring on a second shift of 1,200 workers…nearly doubling your workforce,” he added.
After recent visits to GM and Chrysler plants, Obama followed up his 49th birthday by touring a Ford Motor Company assembly plant in Chicago. While reiterating the success of the administration’s decision to bail out the auto industry, Obama also applauded Ford’s ability to survive the recession without taking government funds.
“Ford was in better financial shape and was able to weather the storm without federal assistance,” said Obama to an audience of 1,700 employees, industry representatives, elected officials, and community and labor leaders.
“That’s a testament to the hard work you all do and the choices this company made.”
The President also announced a new $250 million Export-Import Bank loan guarantee for Ford that will support the company’s efforts to sell cars overseas and increase opportunities for jobs.
“This [loan guarantee] will help Ford export more than 200,000 cars and trucks…that means more production and more manufacturing jobs,” said the President.
The loan initiative, Obama said, is one of several efforts the administration is making to help fulfill a pledge he made during his State of the Union address to double America’s exports of goods and services in the next five years.
“We’re going to support millions of good jobs for American workers to do what they’ve always done: build great products and sell them around the world,” said the President.