They drove to Washington in hybrid vehicles
Posted by page11 on December 4, 2008
Three big US carmakers asked the Congress to renew their plea for an enormous $34 billion government bailout to save their vital industry from a possible collapse. Ford said it might pull through on its own and return to profitability by 2011, but asked for a $9 billion line of credit in case the economy worsens or one of its competitors fails. GM asked for $4 billion this month and another $14 billion next year and Chrysler said it needed $7 billion by December 31, 2008 if they were to survive a perfect storm of a global credit crisis, falling demand for large vehicles and a global economic slump.
An estimated three million jobs and a potential crash of the US economy are at stake as General Motors and Chrysler warn that they could run out of cash within a matter of weeks if they are not given access to billions in low-cost, government-backed loans. Neither automaker expects they would be able to survive if they were forced into bankruptcy protection and the ripple effects of their failure would be felt across the country as auto supplies and related companies collapse in the wake of a sudden loss of business. The White House said it was reviewing the three different plans and was open to a possible aid package, but cautioned not to expect any decisions in the coming days.
Lawmakers turned the three chief executives away empty-handed last month and charged them with coming up with proper plans showing they would be able to repay the loans and attain long-term viability. They were roundly criticised for letting their iconic brands crumble in the face of competition from foreign transplants, whose US plants operate at much lower costs, and failing to develop smaller fuel-efficient cars.
There was also anger that all three had flown to Washington for the hearings in separate corporate jets – more proof of the excesses of the CEO lifestyle. This time, they drove to Washington in hybrid vehicles.
Ford and GM will get rid of their company airplanes and all three chief executives will work for salaries of one dollar a year. All three put forward plans to invest billions in advanced technology, shift their product mix towards more environmentally friendly vehicles and slash operating costs.
Auto workers also offered to share in the sacrifice, despite landmark concessions made last year which have taken billions of dollars in health care liability off the books of the Big Three and will bring labor costs in line with the non-unionised US plants of foreign rivals by 2012.
Industry data showed that auto sales dropped 37 per cent last month, as total US sales fell to 746,789 from nearly 1.2 million vehicles in November 2007.
