They’re rested. They’re contrite (to a point). They’ve taken public relations advisers’ advice and this time didn’t fly on private jets.
The big three automakers CEOs have been back in front of Congress again, making a revamped pitch for a bailout. Some call it a request, others call it begging but the bottom line is they’re asking for taxpayer help. Will it work this time? And, if not immediately, will it happen when the new Congress comes in session? Perhaps:
Leaders of the automotive industry returned to Capitol Hill today to convince Congress that they need a massive loan to keep the industry on its feet.
After an unsuccessful trip to Washington a few weeks ago to plead their case, the CEOs of Ford, General Motors and Chrysler hope this time will be different. For starters they came to Washington in hybrid vehicles instead of private jets as a sign of a commitment to fuel-efficient cars and frugal travel.Lawmakers from the Rust Belt and auto company leaders were also outside the hearing building this morning to display some of the fuel-efficient technology they used for the road trip to Washington.
GM CEO Rick Wagoner, who arrived in a prototype for the forthcoming Chevy Volt, admitted that GM needs an infusion of cash before the end of the month to stay afloat.
“We’re sorry to be asking for this support,” Wagoner said. “We wish the market conditions were better. They’re not. So this is what we need to do.”
Michigan senator Carl Levin, who helped the bipartisan proposal to give billions in loans to the auto industry, also stressed that other countries are helping their auto industries.
This is a crisis unfolding on two levels, with consequences on two levels:
1. THE FINANCIAL LEVEL: If one or more of the car makers goes belly up, it would impact the entire down-the-line medley of businesses that rely on the car industry. There would be significant ripples. Some auto industry bigwigs have suggested it would be more like a financial tsunami. It would add yet another dead weight to the economy at a time when the present and incoming administration are trying to ease the burder.
2. THE POLITICAL LEVEL: The CEOs stubbed their toe so badly last time that it could be political perilous for some politicos to support them. So their best bet may indeed be the next Congress, assuming the third time is the charm.
CNN notes that this appearance is to try and fix the wounds in their feet that were self-inflicted before:
This time GM CEO Rick Wagoner, Ford Motor (F, Fortune 500) CEO Alan Mulally and Chrysler CEO Robert Nardelli drove fuel-efficient hybrids to Washington, rather than flying in on corporate jets as they did two weeks ago.
Ford and GM have since announced they would sell their jets. And all three CEOs have agreed to cut their pay to $1 a year if they get the federal help they are seeking.
After presenting plans to Congress Tuesday that detailed how they would use loans to return to profitability, each company warned of tremendous damage to the economy if they are forced to file for bankruptcy due to lack of help.
In prepared testimony in front of the Senate Banking Committee Thursday, Mulally quoted an estimate from Goldman Sachs that said the impact to the economy from failures could be up to $1 trillion.
But the Big Three face an uphill battle to get loans approved by a skeptical Congress. Even the Democratic leaders of the House and Senate who are in favor of help for the automakers have refused to commit to calling the outgoing members of Congress back next week to vote on an auto bailout.
Congressional leaders are concerned that public opinion has turned strongly against help for the automakers. A CNN/Opinion Research Corp. poll of nearly 1,100 Americans conducted earlier this week found 61% oppose a bailout, while only 36% support it. Even in the Midwest, home to most of the automakers’ remaining plants, 53% of those polled opposed federal help.
CNN points out hat this was a “stunning reversal” of polls before the CEO’s last trip to Congress provided editorial writers, weblogs and comedians seeking high concept punch lines so much wonderful material:
A poll Nov. 11 and 12 conducted by Peter D. Hart Research Associates found 55% supported federal assistance for automakers at that time, and only 30% who believed they should not get federal help.
Most likely outcome: Limited or no success this time. But some kind of limited success once the new Congress takes over — assuming that President-Elect Barack Obama continues to talk about the need to do something and the need for a serious plan from the CEOs.
Joe Gandelman is a former fulltime journalist who freelanced in India, Spain, Bangladesh and Cypress writing for publications such as the Christian Science Monitor and Newsweek. He also did radio reports from Madrid for NPR’s All Things Considered. He has worked on two U.S. newspapers and quit the news biz in 1990 to go into entertainment. He also has written for The Week and several online publications, did a column for Cagle Cartoons Syndicate and has appeared on CNN.