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Wednesday, November 19, 2008

Automakers Face Bailout Blues in Washington

Items of Interest:

Rick Wagoner of G.M., Robert Nardelli of Chrysler and Alan Mulally of Ford seek bailout from CongressNY Times:
Auto Chiefs Fail to Get Bailout Aid -- The chief executives of Detroit’s Big Three automakers departed Washington empty-handed on Wednesday night after two days of pleading for a financial lifeline on Capitol Hill.

As the public hearings and intense behind-the-scenes negotiations appeared to come to naught, the Senate majority leader, Harry Reid of Nevada, went to the floor seeking to bring up the Democrats’ plan to provide $25 billion in aid from the $700 billion financial bailout program. The Republicans objected, effectively killing the plan...

Ali Frick / Think Progress:
Rep. Ackerman: Auto Execs' Private Jet Travel Like Guy At ‘The Soup Kitchen In High Hat And Tuxedo’ — Today, the CEOs of the Detroit Big Three returned to Capitol Hill to ask for $25 billion in loans. Testifying before the House Financial Services Committee, General Motors CEO Rick Wagoner insisted …
Brian Beutler and Alternate Brain
Mitt Romney / New York Times:
Let Detroit Go Bankrupt -- IF General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed.

Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check....
Rick Wagoner / Wall Street Journal:
Why General Motors Deserves Support - Much has been said about the impact of the credit crisis on U.S. auto makers, and whether or not the government should assist the industry during this extraordinary financial turmoil. In these discussions, many critics simply ignore the substantial changes that U.S. auto companies have already made -- changes much like those the critics are calling for as part of any aid package.

At General Motors, we have been responding to fierce competition here and abroad by transforming our business. Over the past decade, we have taken tough actions to cut costs ...

Big Three CEOs Flew Private Jets to Plead for Public Funds -- The CEOs of the big three automakers flew to the nation's capital yesterday in private luxurious jets to make their case to Washington that the auto industry is running out of cash and needs $25 billion in taxpayer money to avoid bankruptcy. ...
Steven Pearlstein / Washington Post
Barack Obama and the Automakers - Even before being sworn in, Barack Obama has confronted his first big test as president and passed it with flying colors.

The test is the urgent request of Detroit's Not-So-Big Three automakers for a $25 billion "bridge loan" to get them through what they want us to believe is a "short-term liquidity crisis" ...
Edward Glaeser / Economix:
First Bankruptcy, Then Possibly a Bailout -- Should billions of taxpayer dollars be used to bail out the automobile industry?

Hard-line economists argue that Detroit lost its way decades ago, and that government support for this industry will be worse than wasteful. Industrial policy advocates disagree, arguing that millions of jobs are at stake and that a General Motors bankruptcy would be a national disaster.

There is a middle path between bailout billions and car company catastrophe: the possibility of limited government aid after automobile companies have entered Chapter 11...
Andrew Ross Sorkin / New York Times:
The Future of the Auto Industry -- Tony Cervone, a spokesman for General Motors, has a warm and friendly way to summarize his ailing company’s ongoing dance with disaster.

“The fact is we’re looking at a short-term liquidity crisis that needs a bridge loan,” Mr. Cervone said this weekend to The Detroit Free Press. To him, G.M. is merely in a temporary bind....
Declan McCullagh / CBS News:
Rewarding Failure: Why Stop With Big 3? — With Tongue In Cheek, Declan McCullagh Urges Treasury Chief To Bail Out Everybody … The Honorable Henry Paulson — U.S. Department of the Treasury — 1500 Pennsylvania Avenue NW — Washington, DC 20220 — Dear Secretary Paulson:

Julie Hirschfeld Davis / Associated Press:
Finger-pointing begins as Senate nixes auto vote
Discussion: Israpundit and Bloomberg
Amity Shlaes / Bloomberg:
Obama Will Take Us Backward By Channeling Keynes — Every crisis has its heroes. For months now we've all been hearing about Walter Bagehot, whose 19th-century injunction to lend “freely” in a panic was cited by the Federal Reserve in its bailouts...
Discussion: Paul Krugman and Hullabaloo
Glenn Hubbard / Financial Times:
How Obama Can Energize The Economy - President-elect Barack Obama faces calls for a “stimulus” package to lift the flagging US economy. Recent asset price declines and job losses underscore these calls. Given the ineffective design of the most recent stimulus package, he would be wise to take a deep breath, then focus on several guidelines and four suggestions for action...
----Automakers truck'n for bailout money