US car makers get frosty reception in bailout plea
Thursday 20 November 2008
The bosses of the big three US carmakers were lambasted for flying on corporate jets as they came to Washington to plead for money to stave off their companies' bankruptcy.
For the second day in a row, Rick Wagoner of General Motors, Bob Nardelli of Chrysler and Ford's Alan Mulally attended hearings on Capitol Hill into a proposed $25bn bailout for the tottering industry. In his most stark warning to date, Mr Wagoner said a bankruptcy filing by GM would inevitably lead to its liquidation.
Members of the House of Representatives' financial services committee are investigating how much money might be needed by the three companies, and on what terms Congress might advance the cash. However, despite proposals to limit executive pay and to hand the government warrants on car company shares, so it can gain if they return to health, the plan pushed by Democrats appeared to be running into the sand.
Reflecting public anger outside the heartlands of the industry, politicians laid in to the executives for driving their companies to the brink of failure, even while pocketing big bonuses.
And several members of the committee attacked the trio's use of corporate jets, which they suggested were an extravagance during the current crisis. Democrats have proposed that the government divert $25bn from the $700bn Wall Street bailout fund to aid the automakers. The White House wants a previous $25bn federal loan programme, aimed at funding new green car production, to be used instead, and Republicans said last night that this was the only proposal with a chance of passing through Congress and avoiding a presidential veto.
Shares in the two publicly traded companies plunged once again in lunchtime trading. GM was down 13 per cent. Ford fell 23 per cent.
Mr Wagoner said: "This is about much more than just Detroit. It's about saving the US economy from a catastrophic collapse."
The car industry directly employs about 355,000 American workers, and it says that, through related industries that are dependent on auto manufacturing and sales, it supports about another 4.5 million jobs.
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 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
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
Sony hack: Angelina Jolie branded 'seriously out of her mind' in further embarrassing leaked email saga
Panic Saturday: 13 million Britons spend £1.2bn – while 13 million others across the country live in poverty unable to afford food
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...