GM workers plead for emergency bailout
Monday 17 November 2008
A bankruptct filing by General Motors would be the beginning of the end of the US-owned car industry, the president of the United Autoworkers union has predicted.
Ron Gettelfinger joined the chorus of industry players pleading for government loans to stave off the collapse of General Motors and its peers, as Congress begins consideration this week of an emergency cash infusion.
"We're on a cliff here," Mr Gettelfinger told reporters on a conference call yesterday. "We need to get this bridge loan and we need it in this lame-duck session" of the Congress, he said. "Would you buy a car from a bankrupt automaker? We don't see bankruptcy as a viable option."
The industry has pointed to academic studies showing that the failure of the three Detroit-based car makers – GM, Ford and Chrysler – could cost three million jobs, directly and through knock-on bankruptcies among suppliers and a hit to the local economy.
Democrats propose taking $25bn (£17bn) from the $700bn Wall Street bailout to fund carmakers.
Barack Obama made the case for government aid in an interview with CBS's 60 Minutes last night, saying a "collapse would be a disaster". A week ago, the president-elect urged George Bush not to block an aid package, when the two men had their first meeting at the White House. Last night, Mr Obama said he was hopeful the White House and Congress will develop an assistance plan with input from management, labour and lenders, but that it "can't be a blank cheque".
Mr Gettelfinger is expected to join the boss of GM, Rick Wagoner, and other chief executives in hearings on Capitol Hill starting tomorrow, and policy advisers expect a fraught debate. Democrats are hoping to put conditions on any loans, including promises to produce more fuel efficient cars. Republicans largely oppose any bailout, with Richard Shelby, the ranking member of the Senate banking committee, saying that the government would be throwing good money after bad. "It would only be postponing the inevitable," he said.
Mr Wagoner in particular is coming under intense pressure over his leadership of GM since 2000. "It's a stretch to say that management is responsible for the things happening now that no one anticipated or expected," he said.
GM said earlier this month that it had burnt through $6.9bn in the three months to the end of September and had drawn on the last of its credit lines from its banks. With just $16.2bn left in the bank, and about $12bn of that needed as a cushion to fund its day-to-day operations, it could run out of money within weeks.
Meanwhile, Opel, a European division of GM, has asked the German government to help it weather the severe downturn that has hit car companies. Chancellor Angela Merkel is due to meet with Opel representatives today.
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Shock poll shows voters believe Ukip is to the left of the Tories
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Ukip candidate jokes about 'shooting peasants' in racist and homophobic rant
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
iJobs Money & Business
$200 - $350 per annum: Carlton Senior Appointments: Managing Producer Office...
$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...
Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...