The chiefs of the Big Three autommakers launched a last-ditch appeal Tuesday for taxpayer aid under the $700 billion Wall Street rescue plan, amid growing signs that supporters lack the votes for a major new rescue plan.
The Bush administration and a large number of Capitol Hill Republicans say the beleaguered industry can tap into an existing $25 billion loan program, but leading Democrats say they would prefer to use both the loans and more from the newly created bailout fund to assist the industry.
Sen. Carl Levin, Michigan Democrat and lead author of a bailout bill for the industry, said the source of the money was less important than that help was made available. He noted that the Republican and Democratic leaders of both chambers have both expressed interest in helping General Motors, Ford Motor Co. and Chrysler LLC get through a severe credit crunch that has emptied showrooms and caused dealerships across the country to shut down.
“There’s a common goal, which is not always the case around here,” he said after emerging from a Senate Democratic caucus. “How we get there is not as important as getting there.”
GM Chairman Richard Wagoner of General Motors Corp., Ford Motor head Alan Mulally and Robert Nardelli of Chrysler LLC are due to testify Tuesday at a hearing held by Senate Banking Committee. In addition, mayors from nearly a score of towns around the country were on Capitol Hill to outline the damage to their local economies should the U.S. automakers go under.
But Senate Republicans, who appear to have the votes to block a more ambitious auto package, argued that the $700 billion Wall Street bailout fund was intended to ease the nation’s credit crunch, not to help out every business that runs into trouble in the market.
“I’m worried where all this could be heading,” said Sen. John Cornyn, Texas Republican.
She said the $25 billion already appropriated through a Department of Energy loan program is the best vehicle for helping the automakers. “We are not in favor of even an additional $25 billion in taxpayer money on top of that,” Mrs. Perino said.
Mr. Levin’s bill offers loans with initial interest rates of 5 percent to auto and auto-related firms in exchange for a federal stake in the companies or warrants that would let the government profit from future gains.
But the measure would not give the federal government a boardroom vote on the firms’ operations or demand hard limits on executive compensation. A vote on the measure which includes an extension of jobless benefits could come as early as Thursday.