Today, representatives of Detroit’s auto industry went before a House Committee to continue asking for our money:
U.S. auto executives seeking billions of dollars in federal aid ran into further skepticism — and fresh proposals — on Capitol Hill today, as members of a House committee considered the automakers’ plans for surviving the nation’s economic crisis and returning to profitability.
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Appearing for a second consecutive day of hearings, executives of General Motors, Ford and Chrysler went before the House committee to make their case for at least $34 billion — and possibly as much as $38 billion — in government bridge loans and lines of credit to avert one or more bankruptcies that could further devastate the economy. Yesterday, the executives testified before the Senate Banking Committee.
Financial Services Committee members reluctant to approve a large infusion of taxpayer money floated alternatives today, including a much smaller emergency transitional amount or a “protected restructuring” under government auspices.
Unlike their colleagues in the Senate, the Congressman on the Committee seem much more willing to give the Big Three what they want, even the Republicans:
Rep. Spencer Bachus (Ala.), the top Republican on the panel, said, “Our number one obligation must be the taxpayer. . . . But we must also recognize that the failure of GM or Chrysler would have a detrimental effect on America.”
Bachus said the only course he could support would be limited government assistance to allow the automakers to return to solvency and put themselves on course for long-term viability. He said he was convinced that “short of a protected restructuring of GM or Chrysler,” the U.S. auto industry would not be able to reform itself.
Rather than a bailout or a bridge loan, Bachus said, he supports a restructuring by the industry itself, with the federal government in a supporting role. Loans needed by the auto industry would come from financial institutions that received hundreds of billions of dollars in federal bailout money under the $700 billion Troubled Assets Relief Program (TARP), as well as from a $25 billion Energy Department program aimed at helping the industry retool for greater fuel efficiency.
“What we need is a solution, not a first installment,” he said.
Congressman, that’s what the Bankruptcy Laws are for. We don’t need Congress creating an entirely new regulatory scheme just so these three companies can avoid the reality that’s staring them in the face.
I’m sure we’ll see something put on the table next week, maybe more than one proposal, but I put the odds of passage at less that 40%.
Has anyone been to a car dealer lately. Their financing companies are screwing them with high interest rates for loans to consumers. This is with people who have good credit. GMAC is a good example of the greed wagon and these jerkoff’s got money from the government. No wonder they can’t sell cars.