10am – Senate Banking Hearing on Proposed Auto Industry Bailout

After $8 trillion dollars has been committed to Wall Street with no Congressional oversight, Congress is spending another week debating the merits of a proposed auto industry bailout that is proposed to cost $34 billion.

The chiefs of Detroit’s auto industry will attempt to close a deal for survival today, pleading with a U.S. Senate committee for $34 billion in loans with pledges of future profits, warnings about the current economy and strident arguments against bankruptcy.

"The few" senators "that I’ve been able to talk to think it’s a realistic, straight effort that shows a road map to economic viability," said Sen. Carl Levin, D-Mich. "That doesn’t mean this thing has majority support yet."

The Senate Banking, Housing and Urban Affairs Committee will be the first to review the pitches for $18 billion to GM, $7 billion to Chrysler LLC and a $9-billion line of credit to Ford Motor Co.

On Tuesday, GM, Ford and Chrysler presented their plans to restructure to Congress and on Wednesday, Union leaders met to approve weakening their health care trust and laid-off workers program:

Worried about their jobs and warned that the cost of failure could be a depression, hundreds of leaders of the United Auto Workers voted overwhelmingly Wednesday to make concessions to the struggling Detroit Three, including all but ending a much-derided program that let laid-off workers collect up to 95 percent of their salaries.

Union leaders also agreed to let the cash-starved automakers delay billions of dollars in payments to a union-administered trust set to take over health care for blue-collar retirees starting in 2010.

In addition, they decided to let the Detroit leadership begin renegotiating elements of landmark contracts signed with the automakers last year, a move that could lead to wage concessions.

GM, Ford and Chrysler executive have also offered to make concessions:

Ford offered to cancel management bonuses and salaried employees’ merit raises next year, and GM said it would slash top executives’ pay. Ford and GM both said they would sell their corporate aircraft.

In addition, this week, rather than traveling to DC by corporate jet, they all took hybrid cars from Detroit for today’s and tomorrow’s hearings.

10amSenate Banking
Hearing on "The State of the Domestic Automobile Industry: Part II"

Witnesses

Panel 1

  • Gene L. Dodaro , Acting Comptroller General, United States Government Accountability Office

Panel 2

  • Ron Gettelfinger , President, International Union, United Automobile, Aerospace and Agricultural Implement Workers of America
  • Alan Mulally , President and Chief Executive Officer, Ford Motor Company
  • Robert Nardelli , Chairman and Chief Executive Officer, Chrysler LLC
  • G. Richard Wagoner , Jr., Chairman and Chief Executive Officer, General Motors
  • Keith Wandell , President, Johnson Controls, Inc.
  • James Fleming , President, Connecticut Automotive Retailers Association
  • Mark Zandi , Chief Economist and Cofounder, Moody’s Economy.com

Live coverage at CSPAN (direct realplayer link) and the committee website.

For later viewing, the hearing will be posted in the CSPAN archive.

Also of note today, Ben Bernanke is scheduled to speak at the Federal Reserve’s Conference on the Housing and Mortgage Markets. 11:15 am, live on CSPAN-2 (direct realplayer link).

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