US auto rescue plan heads for showdown in Congress
AFP - Monday, December 8
WASHINGTON (AFP) - - Lawmakers on Sunday braced for a showdown over a multi-billion-dollar rescue for US automakers on the brink of collapse, as pressure mounted for a major remake of the car industry.
Democrats said a deal was imminent after a weekend of negotiations with the White House on a short-term loan package of about 15 billion dollars, but Republicans warned that a tough debate awaited the proposed bill this week.
A business-savvy "car czar" could be named to oversee taxpayer-funded loans to the Big Three automotive giants, which employ millions of US workers, but critics of the bailout said money alone would not solve the industry's woes.
"This is a bridge loan to nowhere," Senator Richard Shelby said on Fox News, adding that the unionized shops had grown unwieldy and needed downsizing.
"These companies basically have failed," said Shelby, the top Republican on the Senate banking committee.
"They probably need, according to some people, about 60 percent of the management to go, and about a 40 percent downsize of the workers," he said.
"We would like to save them. But they've got to save themselves," said Shelby, who added he hoped for an "extended debate" on the bill but declined to say whether Republicans would try to block it with a filibuster.
Democratic Senator Carl Levin, a top advocate for the car industry, said the stakes were high for the US economy, with the country already reeling from the loss of a half million jobs in November.
"We cannot afford to lose the millions of jobs that would be lost if any of the Big Three go under," Levin told Fox News.
"The big losers, however, will be the American people," said Levin, who represents the rust belt state of Michigan, home to the foundering US car industry. He raised the specter of three million job losses if automakers fail.
Levin said he was "very confident there will be a deal and that will happen within the next 24 hours," but when asked if Democrats had enough votes to pass it, he admitted: "That's a much more complicated question."
Congressional aides have said the deal would amount to a short-term loan for the automakers, and is intended to sustain them through March when president-elect Barack Obama will be in the White House.
Obama urged the car chiefs to change their ways or quit, but stressed that bankruptcy was not an option.
"If this management team that's currently in place doesn't understand the urgency of the situation and is not willing to make the tough choices and adapt to these new circumstances, then they should go," Obama told a news conference.
"If, on the other hand, they are willing, able, and show themselves committed to making those important changes, then, you know, that raises a different situation."
After chiefs of General Motors, Ford and Chrysler pleaded for urgent aid last week and alarming government figures were released showing the unemployment rate at 6.7 percent, a 14-year high, Democrats dropped their opposition to a White House-backed plan to borrow rescue funds from a subsidized loan program for fuel efficient development.
In exchange, leading Democrats said any loan must be swiftly repaid, and pressed for a government-appointed "car czar" to oversee the bailout. Former General Electric boss Jack Welch is one of the names mentioned for the post.
Democrat Chris Dodd, who chairs the Senate banking committee, even suggested that General Motors chief Rick Wagoner -- who asked lawmakers from some 18 billion dollars in aid as part of a combined 34-billion dollar plea by GM, Ford and Chrysler -- may need to be replaced.
"I think you have to consider new leadership. If you're going to restructure this, you have to bring in a new team in my view," Dodd told CBS. "I think he has to move on."
For his part, United Auto Workers chief Ron Gettelfinger rejected accusations that inflated worker wages have made the US companies unable to compete with foreign carmakers like Nissan and Volkswagon.
"I think the men and women of the UAW, who have worked so hard to help these companies succeed, have made numerous concessions up to this point in time. And we should be given some recognition and some credit for that," he told ABC television.
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