Automakers need to make case for aid

WASHINGTON In a letter to the auto executives released Friday afternoon, House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid demanded a detailed accounting by Dec. 2 of the companies' financial condition and short-term cash needs, as well as how they would achieve long-term viability.

"The auto companies' shareholders, business partners and prospective benefactors - the American people - deserve to see a plan that is accountable to taxpayers and that is viable for the long-term," Pelosi, D-Calif., and Reid, D-Nev., wrote.

The Democrats also called on the automakers to show how they would ensure that the government would be reimbursed and share in future profits, eliminate dividends and lavish executive pay packages, meet fuel-efficiency standards, and address their health care and pension obligations to workers if they got the federal help.

The Bush administration sharply criticized the Democrats for departing Washington for a congressional recess without acting on a rescue for the car makers.

"How could they leave town when the auto companies were just here (this) week saying some of them were on the verge of running out of cash?" Commerce Secretary Carlos Gutierrez said in an interview. "I think it's a very irresponsible attitude toward a very serious matter."

White House press secretary Dana Perino said it was "appalling that Congress decided to leave town without addressing a problem that they themselves said needed to be addressed."

And President George W. Bush himself went on the offensive - although with more reserved language - to press the point that leaders failed to grab onto a bipartisan proposal.

"Unfortunately, the leadership in Congress adjourned without even allowing this measure to come up for a vote," Bush said in his Saturday radio address, taped Friday and released early by the White House. "My position is clear: If the automakers are willing to make the hard decisions needed to become viable, they should be able to receive the funds Congress already allotted to them for other purposes."

After making an auto bailout a top priority of this week's brief postelection session, Democrats scrapped planned votes on a rescue plan they said lacked support - or a clear justification. They said their request for a plan from the Big Three was designed to give General Motors Corp., Ford Motor Co., and Chrysler LLC another chance - after a disastrous pair of hearings this week on Capitol Hill - to make their case to lawmakers and the public, Pelosi said.

"It's another opportunity for them to say to the American people, 'Give us your money, because we will put it to good use,"' Pelosi, D-Calif., told reporters.

Hearings are expected the week of Dec. 1 and lawmakers could consider legislation the following week, but only if the industry shows that taxpayers and auto workers would be protected, congressional leaders said.

Automakers have promised to submit the blueprint Democrats have demanded.

GM spokesman Greg Martin said they would meet Congress' deadline and were "ready to work through their concerns and to deliver the accountability the taxpayers deserve before committing support to the domestic auto industry."

U.S. automakers are struggling to stay afloat heading into 2009 amid an economic meltdown, a precipitous drop in sales and a tight credit market. The three companies burned through nearly $18 billion in cash reserves during the last quarter and GM and Chrysler have said they could collapse in weeks.

Detroit's car makers employ nearly a quarter-million workers, and more than 730,000 other workers produce materials and parts that go into cars. If just one of the automakers declared bankruptcy, some estimates put U.S. job losses next year as high as 2.5 million.

Congress is weighing a tricky political question: Should it spend billions more on unpopular government bailouts or run the risk of bearing the blame of a U.S. auto industry meltdown?

Bush and congressional Republicans said lawmakers should have considered a bipartisan plan to let the automakers tap a separate $25 billion loan program for fuel-efficient cars for their short-term cash needs.

Senate Republican Leader Mitch McConnell of Kentucky described Democrats' stop-and-start attempts to push through the auto bailout as a "bizarre and confusing" spectacle. He said the White House-backed plan "would be a way to get a law," but he wouldn't say whether he believes Congress should return next month to address auto industry's predicament.

"I think we all accept that they're in serious trouble. No one is happy about that. But what to do about it remains to be seen," McConnell said.

Supporters of the bipartisan measure to temporarily divert the fuel-efficiency funds to cover the auto companies' operations are hopeful of winning support in December.

But Pelosi reiterated her opposition to that approach, which is vehemently opposed by environmentalists jealously guarding that money for the development of cars that use less gasoline.

"It's like taking your kids' college education fund and spending it on your credit card bills," Pelosi said.

Gutierrez said it's more like dipping into a terminally ill child's college fund to pay for lifesaving surgery.

"There will be time to replenish the fund, but what really matters is to save the life of the child," the Commerce secretary said.

Democratic leaders acknowledged Thursday that their favored approach - carving the $25 billion in loans from the $700 billion Wall Street bailout fund - lacked enough support in Congress, particularly after the auto executives' poor performance in high-profile appearances on Capitol Hill.

The chief executives of the Big Three urged lawmakers to sign off on the loans this week, saying the economic meltdown had staggered their industry after they had taken steps to restructure and produce more fuel-efficient cars.

But they were roundly criticized for traveling aboard corporate jets to seek billions in government aid and failing to assure lawmakers they wouldn't need more money.

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