Monday, November 17, 2008
The Big 3 Bailout-Auto executives in spotlight as U.S. weighs bailout
By John Crawley and Paul Eckert
WASHINGTON (Reuters) - U.S. automakers should consider executive shake-ups if it would ensure congressional backing for a bailout supporters say is needed to prevent industry collapse, an architect of the effort said on Sunday.
The statement by Carl Levin of Michigan underscored the difficulty Democrats are having in finalizing a rescue plan of up to $25 billion and securing majority support in the Senate, which plans to begin debate on the matter on Monday.
"If it was the difference between getting this kind of support or not, obviously the management should consider resigning," Levin, a staunch industry ally, said on NBC's "Meet the Press."
Levin said he has not been approached on that ultimatum. But some lawmakers have raised the issue and it has factored in a broader national discussion of whether taxpayers should save General Motors Corp, Chrysler LLC and Ford Motor Co.
One influential Republican cited corporate decision-making over the years as the primary reason for Detroit's distress.
"I don't believe they've got good management. They don't innovate. They're a dinosaur, in a sense, and I hate to see this," Richard Shelby, the top Republican on the Senate Banking Committee, said on NBC's "Meet the Press."
Levin, lobbyists and other rescue supporters contend a bailout is justified because millions of factory, supplier, dealer and other jobs are tied to the health of industry.
The companies face bleak liquidity prospects with sales plunging and credit markets choked for corporate and consumer borrowing. Most consumers finance their auto purchases.
GM has said it could run short of cash in early 2009. All three manufacturers reject bankruptcy as an option.
The White House and Republicans who have spoken out on the issue do not unanimously oppose help for Detroit, but there is strong aversion to a bailout.
MANAGEMENT AN ISSUE
Jon Kyl of Arizona, the Republican Senate whip, does not see the chamber approving a straight, $25 billion bailout next week.
"I don't speak for every Republican, but I suppose most of us will oppose it as a very bad idea. This didn't happen to the auto companies overnight," Kyl said on "Fox News Sunday."
Another author of bailout legislation has no plans to make assistance conditional on management changes even though he is not convinced a bailout will pass.
"I'm not sure who I want the new management to be," House of Representatives Financial Services Chairman Barney Frank said on the CBS program "Face the Nation." Continued...
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