Washington Humbled and fighting for survival, Detroit’s once-mighty automakers appealed to Congress with a retooled case for a bailout as large as $34 billion Tuesday, pledging to slash workers, car lines and executive pay in return for a federal lifeline. GM and Chrysler said they needed an immediate cash infusion to last until New Year’s, and warned they could drag the entire industry down if they fail.
Chrysler LLC said it needed $7 billion by year’s end, and General Motors Corp. asked for a quick $4 billion as just the first installment of as much as $18 billion to stay afloat and weather even worse economic storms. Ford Motor Co. had a more upbeat report, but the other two members of the U.S. Big Three painted the direst portraits to date — including the prospects of shuttered factories and massive job losses — of what could happen if Congress doesn’t quickly step in.
“Failing to act now will hurt many American families and undermine our country’s economic recovery, far outweighing the costs related to supporting an industry that touches every district in every state of the nation,” Chrysler said.
“There isn’t a Plan B,” said GM Chief Operating Officer Fritz Henderson. “Absent support, frankly, the company just can’t fund its operations.”
New sales figures underscored the seriousness of the situation. U.S. light vehicle sales at General Motors and Chrysler plunged more than 40 percent in November, while Ford’s sales dropped 31 percent, battered by an economic storm that has sent consumer demand for new vehicles to lows not seen in decades.
Democratic leaders have said they might call Congress back next week to pass an auto bailout — but only if the carmakers’ blueprints show the carmakers have reasonable plans to stay viable with the help.
Making no commitments, House Speaker Nancy Pelosi, D-Calif., said Tuesday, “We want to see a commitment to the future. We want to see a restructuring of their approach, that they have a new business model, a new business plan.” She said, “it is my hope that we would” pass legislation to help the industry.
Senate Majority Leader Harry Reid, D-Nev., said he would try to jump-start debate Monday on an auto bailout measure. “We have to make sure we do everything we can to take care of the auto industry,” he said. “I hope we can do something.”
Nervous investors sent the Dow Jones industrials bouncing up and down all day, though they finished up 270 points, partly making up for Monday’s plunge of nearly 680.
All three companies’ plans envision the government getting a stake in the auto companies that would allow taxpayers to share in future gains if they recover.