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Journalism of Courage
The chief executives of General Motors Corp and Chrysler LLC said they would consider restarting merger talks if needed to win their slice of up to $34 billion in emergency US government aid.
“I would be very willing to look at it seriously,” GM CEO Rick Wagoner told the Senate Banking Committee on Thursday, adding that merger talks earlier this year were dropped on concerns GM did not have the financing to merge with Chrysler.
Chrysler CEO Robert Nardelli said his job would likely be the first to go in a merger with GM, but if that would save Chrysler and its workers “I would do it.”
Leaving their corporate jets in Detroit and driving to Washington, the chiefs of the Big Three automakers, including Ford Motor Co CEO Alan Mulally, pledged to refocus on higher fuel efficiency vehicles and lower production costs.
But they encountered deep skepticism among lawmakers who are suspicious of such promises, given the companies’ past failures to ween themselves from gasoline guzzlers and to make innovative cars that consumers want to buy.
“I don’t trust the car companies’ leadership,” said New York Democratic Sen. Charles Schumer at the hearing.
But in a comment reflecting many lawmakers’ sentiments, he added, “We can’t let the industry fail.”
Most lawmakers want to help Detroit, but existing bailout proposals are stuck in a political gridlock between administrations, with President George W. Bush a lame duck, and President-elect Barack Obama waiting to be sworn in January 20.
Underscoring the difficulty of getting an aid measure quickly through Congress, Senate Majority Leader Harry Reid, House Speaker Nancy Pelosi, Senate Banking Committee Chairman Chris Dodd and House Financial Services Committee Chairman Barney Frank sent a letter to Bush on Thursday urging him to use the $700 billion bank bailout program to help Detroit.
The administration has said that program is for helping the financial industry, but the four Democrats argued in their letter that it was becoming clear a failure of the auto companies would have a big impact on the financial sector.
Meanwhile, no congressional action on aid is expected before next week and perhaps not even then, despite dire warnings GM could collapse by the end of December without aid.
“Congress may consider legislation to provide assistance to the domestic automobile industry next week,” said the letter to Bush.
The auto CEOs will appear before House Financial Services Committee on Friday.
