Obama, Congress proceed with caution

President-elect Barack Obama and congressional leaders were taking a wait-and-see attitude Wednesday as the nation’s Big Three carmakers prepared to make a critical pitch for tens of billions of dollars in federal aid.

Mr. Obama, addressing reporters in Chicago, offered qualified praise for the rescue plans submitted to Congress Tuesday by the heads of General Motors Corp., Ford Motor Co. and Chrysler LLC, which asked in total for as much as $34 billion in taxpayer-financed loans and credit lines.

“It appears, based on reports that we’ve seen, that this time now the executives from these automakers are putting forward a more serious set of plans” than the vague blueprints the Big Three presented to Congress in mid-November, Mr. Obama said.

But the president-elect said he would monitor hearings before the Senate Banking Committee Thursday and the House Financial Services Committee Friday before passing judgment on a bailout deal.

The carmakers say they have been blindsided by a global credit crunch and recession that has caused sales to plummet. Skeptics counter that the industry’s wounds are largely self-inflicted, the product of years of bad design, engineering, marketing and financial decisions.

General Motors, in its submission to Congress, said it needed $4 billion in loans by the end of the month just to stay in business. Even Ford, the healthiest of the three U.S. auto giants, warned that the failure of one of its U.S. rivals could drag it down as well.

The White House also expressed some openness to the automakers’ proposal, but also pointedly did not go so far as House Speaker Nancy Pelosi’s statement Tuesday that bankruptcy for any of the three leading U.S. carmakers is “not an option.”

“We don’t want anybody to be negatively affected by a bankruptcy but sometimes companies do fail. That’s just the way it is in our system,” said White House press secretary Dana Perino.

Mrs. Pelosi and Senate Majority Leader Harry Reid, Neveda Democrat, say they are prepared to call Congress back to another lame-duck session next week if the auto makers can make a persuasive case for aid.

Mrs. Perino said that White House officials were “poring over” the automakers’ proposal, and that the key to the administration is whether or not they think the plan will launch the companies toward viability.

“That is the linchpin of where our support would lie,” Mrs. Perino said. “It sounds to me like the companies have given this a lot of thought and are willing to make some tough decisions.”

She said how the plans are received on Capitol Hill will be a crucial test, but that helping the automakers is “already a step beyond what the president’s instincts would be,” she said.

Backed by a major lobbying blitz from major business and labor groups, executives from the Big Three were on Capitol Hill Wednesday giving closed-door briefings to members and key staffers ahead of the next two days of hearings.

United Auto Workers President Ron Gettelfinger, who will also testify before the congressional panels, told reporters in Detroit his union was willing to consider new concessions to help win passage of the federal aid package. In particular, he said the union was open to discussing its much-criticized “Jobs Bank,” which in some case allows laid-off auto workers to collect close to the full salary for two years after losing their jobs.

But the union leader also expressed frustration with the way the auto package has been portrayed. He said the car companies are asking for federal loans that they expect to repay and that the bailout is not intended just for the Big Three and its well-compensated workers.

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