The Reaction to Today’s Auto Hearings

By December 5, 2008Economy, Labor Unions

Had no time to pay attention to today’s hearing by the House Financial Services Committee on federal financial aid for the domestic auto industry. Heck, it may still be going on. (Check CSPAN. Nope.)

Henry Payne of The Detroit News, a critic of government aid, reports at National Review Online what he’s hearing:

Detroit, Mich. — They can’t get it done.

That is the backroom word on Capitol Hill as auto executives from the Detroit Three wrapped up a second, and final, day of hearings before the House in attempt to get a $35 billion loan to keep them solvent.

Instead, speculation is that the Bush administration — loath to watch a U.S. automaker drown in its last month in office — will offer $8-14 billion band-aid to GM and Chrysler (both of which will run out of cash this month) possibly from the TARP.

“Detroit’s automakers will be lucky to get less than half of the $34 billion they’re seeking for survival, as several House members said today there was simply not enough time to examine the industry’s pitch and hammer out a consensus by next week,” reads one report from the Detroit Free Press. “Only stopgap funding of up to $14 billion appeared possible next week.”

This will act as a tourniquet for the two most-crippled automakers so they can limp along until the Obama administration can convene with a new Congress and tackle long-term surgery in the new year.

 Meanwhile, the latest from The Detroit News’ webpage:

  • GM Board member says prepackaged bankruptcy ‘a fantasy’
    A member of General Motors Corp.’s Board of Directors today reiterated that the automaker would consider all options, including Chapter 11 bankruptcy, if Congress refuses to loan the company as much as $18 billion in emergency aid. – 5:48 pm
  • Chrysler hires bankruptcy advisers
    Chrysler LLC’s hiring of a firm that specializes in bankruptcy proceedings was its adherence to the request by Congress to study the drastic step as an option, the automaker said in a statement today. – 5:02 pm
  • GM to lay off 2,000 more workers
    With Congress debating whether to give General Motors Corp. up to $18 billion in financing, the automaker announced 2,000 more layoffs today at three factories. – 5:02 pm
  • Congressional agency: Auto aid bill can’t use $25B from energy retooling program
    WASHINGTON — The Congressional Budget Office said a compromise bill to aid automakers can’t provide $25 billion from an Energy Department retooling program, dealing another blow to efforts to win quick aid before Congress goes home for the year. – 5:02 pm

Leave a Reply