Address:   Home Page

Markets

U.S. open in 2 hrs, 26 mins
DJIA
8,769.70
-245.40
 
2.72%
NASDAQ
1,599.06
-53.32
 
3.23%
S&P 500
906.65
-28.05
 
3.00%
10yr Note
110.844
0.0312
 
0.03%
FTSE 100
4,463.25
-44.26
 
0.98%
Nikkei 225
8,876.42
-362.82
 
3.93%
Hang Seng
14,415.91
-571.55
 
3.81%
Euro (in USD)
1.366
0.0159
 
1.18%
Yen (per USD)
91.61
-1.82
 
1.95%
Oil
42.63
-5.95
 
12.25%
Gold
841.70
-24.30
 
2.81%
Get Quote for:
Symbol
Lookup

BUSINESS NEWS

INVESTING

PERSONAL FINANCE AT WALLETPOP

SMALL BUSINESS

Financial Glossary

Blaming Begins as Senate Nixes Auto Vote

By JULIE HIRSCHFELD DAVIS
,
AP
posted: 48 DAYS 18 HOURS AGO
comments: 1476
filed under: Financial Crisis
PrintShare
Text SizeAAA
WASHINGTON (Nov. 19) - A Democratic Congress, unwilling or unable to approve a $25 billion bailout for Detroit's Big Three, appears ready to punt the automakers' fate to a lame-duck Republican president. Caught in the middle of a who-blinks-first standoff are legions of manufacturing firms and auto dealers — and millions of Americans' jobs — after Senate Democrats canceled a showdown vote that had been expected Thursday. President George W. Bush has "no appetite" to act on his own.
U.S. auto companies employ nearly a quarter-million workers, and more than 730,000 other people have jobs producing the materials and parts that go into cars. About 1 million on top of that work in dealerships nationwide. If just one of the auto giants were to go belly up, some estimates put U.S. job losses next year as high as 2.5 million.
"If GM is telling us the truth, they go into bankruptcy and you see a cascade like you have never seen," said Sen. George V. Voinovich, R-Ohio, who was working on one rescue plan Wednesday. "If people want to go home and not do anything, I think that they're going to have that on their hands."
The automakers — hobbled by lackluster sales and choked credit — are burning through money at an alarming and accelerating rate: about $18 billion in the last quarter alone. General Motors Corp. has said it could collapse within weeks, and there are indications that Chrysler LLC might not be far behind. Ford Motor Co. has said it could get through the end of 2008, but it's unclear how much longer.
For now, however, with the federal emergency loan plan stalled in the Senate, lawmakers in both parties are engaged in a high-stakes game of chicken, positioning themselves to blame each other for the failure.
Senate Majority Leader Harry Reid, D-Nev., scrapped plans Wednesday for a vote on a bill to carve $25 billion in new auto industry loans out of the $700 billion Wall Street rescue fund.
It's really up to Bush's team to act, he said.
"I don't believe we need the legislation," Reid said. Treasury Secretary Henry Paulson can tap the financial industry bailout money to help auto companies, Reid said, but "he just doesn't want to do it."
Not our responsibility, countered the White House.
"If Congress leaves for a two-month vacation without having addressed this important issue ... then the Congress will bear responsibility for anything that happens in the next couple of months during their long vacation," said Dana Perino, the White House press secretary.
She said there was "no appetite" in the administration for using the financial industry bailout money to help auto companies.
The White House and congressional Republicans instead called on Democrats to sign on to a GOP plan to divert a $25 billion loan program created by Congress in September — designed to help the companies develop more fuel-efficient vehicles — to meet the auto giants' immediate financial needs.
Voinovich and Sen. Kit Bond, R-Mo., along with Democratic Sen. Carl Levin of Michigan, were at work on that measure Wednesday, trying to placate skeptical Democrats by including a guarantee that the fuel-efficiency loan fund would ultimately be replenished.
"It is the only proposal now being considered that has a chance of actually becoming law," said Republican leader Mitch McConnell of Kentucky.
If an acceptable deal emerges, Reid said it could be passed as part of a measure to extend jobless aid to unemployed workers whose benefits have run out. A vote on that bill is likely on Thursday. Negotiators were discussing a scaled-down aid package of $5 billion to $8 billion to help the automakers survive through year's end.
But there was little sign that Democratic leaders would go along.
"We have to face reality," Reid said.
They are vehemently opposed to letting the car companies tap the fuel-efficiency money — set aside to help switch to vehicles that burn less gasoline — for short-term cash-flow needs.
All of which leaves the Big Three bracing for a bleak winter without government help.
GM CEO Rick Wagoner told a House committee Wednesday that the downfall of his industry would ripple through communities around the nation. Pressed by lawmakers, Wagoner wouldn't say precisely when GM would run out of money without a government lifeline, but he disclosed that the company now was burning through $5 billion a month.
Still, with the $25 billion emergency package, "we think we have a good shot to make it through this," Wagoner said.
Many lawmakers in both parties are now openly discussing whether bankruptcy might be a better option for auto firms they regard as lumbering industrial dinosaurs that have done too little to adjust their products and work forces for the 21st century.
The carmakers argue that bankruptcy would devastate their companies, but proponents say it would give them a chance to reorganize and emerge stronger and more competitive.
It's unclear, though, whether Democrats controlling Congress are willing to risk being blamed for letting one of the Big Three — symbols of the nation's once-mighty manufacturing sector — go under.
Bailout-shy lawmakers got an earful from jittery constituents last month when the House let an early version of the Wall Street rescue fail, sending the Dow Jones industrials tumbling and erasing more than a trillion dollars in retirement savings and other investments. Congress took a deep breath and reconsidered, passing the plan a few days later.
Faced with a similar collapse in the auto industry, the Bush administration might yet decide to step in to help the auto companies, or the Federal Reserve could step in — though both have steadfastly refused to do so.
If not, lawmakers have left themselves a contingency plan: Come back to Washington in December for yet another postelection session where they might be able to strike the deal that now seems beyond reach.
Democratic leaders are planning to gather for an economic conference the week of Dec. 8, noted House Majority Leader Steny H. Hoyer, D-Md.
"That is available," Hoyer said this week. "The year has not ended."
Associated Press writers Sam Hananel in Washington and Tom Krisher in Detroit contributed to this report.
Copyright 2008 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.
2008-11-19 15:35:13
Bookmark:

Recent Comments

Post Your Own  
1 - 10 of 1476
1476 comments

Liz9468 02:39:10 AM Nov 21 2008

Report This!

Hey everybody watch the movie Tucker A man and his Dream something to that effect. Based on a true story.

Liz9468 02:36:29 AM Nov 21 2008

Report This!

If the workers were making 81.00 an hour they should be making mercedes benz not a Ford. What does the CEO make an hour? Everybody read about Preston Tucker and what the big 3 did to him after World War 2. Hey the Electric Car was invented in 1832 I think the Big 3 have had more than enough time to get it right. Bring back the Tuckers 47 still in existence today and one was auctioned off at over 1 million bucks.

JCT252 10:03:18 PM Nov 20 2008

Report This!

Well somebodys lying. Hal Thomas the columnist stated that the average wage for auto owrkers is about $81.00 an hour with benifits. Who do you believe. I hear that they get 3 months vacation at 81.00 an hour

FERGIE2065 07:13:01 PM Nov 20 2008

Report This!

Don’t misunderstand me, THE UNION MEMBERS ARE MAKING TO MUCH MONEY TO BUILD SOMETHING NO ONE WANTS but but but ............... In my mind it still goes back to the CEOs................. I though one of the things we (the stockholders) were paying Wagoner to do was take care of union problems. If he can’t handle that he most certainly is not earning his $2,500,000 a week.

Stephbach2 06:55:19 PM Nov 20 2008

Report This!

TTHE INEXPERIANCE, KNOW NOTHING BLACK CLOWN WAS NOT ELECTED HE WAS *SELECTED* BY ALL THE BLACKS OUT OF SPITE JUST BECAUSE HE IS BLACK,,HOLD ONTO YOUR MONEY AMERICA N DON,T BUY ANYTHING N HOLD BACK,CAUSE THIS INEXPERIANCE BLACK CLOWN IS GONA BRING THIS COUNTRY INTO DEPRESSION, STOCK MARKET ON THE DECLINE EVERYDAY N WILL SOON CRASH.,THE SECURITY OF AMERICA WILL SOON BE GRAVELY IN DANGER ONCE BUSH * WHO KEPT AMERICA SAFE IN THE 8 YEARS AS PRESIDENT* LEAVES OFFICE., 1000,S OF AMERICANS ARE BUYING GUNS TO PROTECT THEMSELFS, WE URGE ALL AMERICANS 2 HANG YOUR FLAG AT HALF STAFF FOR THE DEATH OF AMERICA,UNTILL THE *BLACK CLOWN -STEPS DOWN

Cruml51 05:58:20 PM Nov 20 2008

Report This!

I am sure the automakers can formulate a plan at least as clear, and comprehensive as the 700 billion dollar bailout. Building a car factory is much more involved than builing a pizza parlor, or a fish and chips. Some of th plants GM and Ford were usin using the same ones that were used when thy built the tanks, guns, and aircraft that was used to fight WWII. It is not like Wal Mart that cn move a half a mile inorder to secure a better location. Of course we could just rely on foriegn manufacturers to retool, and build needed vehicles if we decide to not help U.S. automakers. Sounds like a trojan horse.

BillLesD 05:10:42 PM Nov 20 2008

Report This!

Hysterical how people put it all on the "executives". Well folks, look at the big FAT union payouts. The foreign car companies undercut us in out own country because they run a NON-UNION SHOP!!!!!! Get with it it, idiots. A union retiree on Rush Limbaugh yesterday said he's been collection his pension for longer than he WORKED!!!! Another guy I heard sad he retired at age 57. Sweet deal the rest of us can't get. They reported that the union guy that drives the new cars 2 miles from the assembly line to the staging ( shipping) area all day long, get paid 100,000 a year!!!!!! Think he's overpaid??? Sure is. If you want to know who is killing the American auto indiustry, its the unions. And guess who is indebted to the unions? OBAMA. So when he is forced to bail them out, kiss your own tax dollars good bye!!!

BShlensky 04:11:29 PM Nov 20 2008