American automakers will not get a federal bailout before the Thanksgiving holiday, but they will have a chance to ask again when Congress returns from its recess. Congressional leaders sent auto executives home after a contentious week of hearings on the bailout plan, asking them to draw up business plans explaining what they would do with federal money before the government will consider their plight any further.
The Washington Post reports, "With two of Detroit's Big Three automakers teetering on the brink of collapse, congressional leaders yesterday refused to advance a proposal for a federal bailout, saying auto industry executives had failed to persuade lawmakers that they would make good use of the money. Instead, House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Harry M. Reid (D-Nev.) ordered General Motors, Chrysler and Ford to submit detailed proposals by Dec. 2 explaining how an emergency infusion of government cash could put them on a path to financial health."
The current proposal is dead. The Senate had originally planned to pass the bailout as an amendment to a routine bill extending unemployment benefits - but yesterday sent that bill on to President Bush without any automaker aid included.
The Congressional committees responsible for overseeing the industry will reconvene after Dec. 2 to consider the proposals. If the companies can come to an agreement that passes muster with committee members, Congress could be called back into session on Dec. 8 to vote on a bailout proposal.
The AP reports, "The demise of the rescue - at least for now - left uncertain the fate of General Motors Corp., Ford Motor Co. and Chrysler LLC, and sent Wall Street spiraling to its lowest level in years. The Dow Jones industrials dropped 445 points, the second straight plunge of more than 400, and hit the lowest point in nearly six years."
A White House-backed compromise, which would have extended a loan to automakers but only by reprogramming money that had already been designated to help them design more fuel-efficient vehicles, also failed. It fell apart in what Autoblog called "an amazing piece of political theater." Negotiators who worked on the compromise were preparing to announce their agreement on a plan, and had scheduled a press conference to outline details. But their colleagues in the leadership literally elbowed them out of the way and killed the compromise in front of the reporters who had gathered to hear it. "A team of Congressional Democrats led by House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid walked into the room in which the press conference was to be held and announced that they didn't support the compromise bill and that CEOs of the Big 3 would have to come back after the Thanksgiving holiday and present a plan on how any loans that might be given would be used," Autoblog explains.
The automakers should be able to last until the next hearing is held. David Cole, chairman of the Center for Automotive Research told USA Today "that the automakers are financially stable enough to make it another two weeks and that providing plans to Congress will help win over critics who think the industry will fail even if it gets a bailout."
Perhaps, when the leaders return to Washington with their new business plans, they'll remember to jetpool this time.
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