Monday, December 15, 2008
White House considers auto bailout options
WASHINGTON (AFP) — The White House said Monday it was studying options for a bailout of the US auto industry without indicating when an announcement would be made.
"We're reviewing automakers financial information, considering our policy options, and when we have something to announce, we'll announce it," said White House spokesman Tony Fratto.
He refused to "confirm or knock down or otherwise read out our contacts or deliberations, timing or substance."
The Big Three US automakers -- General Motors, Ford and Chrysler -- have warned that without a package of loans, millions of jobs could be lost, which would send ripple effects through the nation's already faltering economy.
President George W. Bush, who has hinted the government could tap a massive federal rescue package to aid the automakers, was Monday on his way back to Washington after surprise weekend visits to Iraq and Afghanistan.
His return could speed up a deal, after Bush said: "We're now in the process of working through with the stakeholders a way forward, and we're not quite ready to announce that yet.
He told reporters aboard Air Force One that "this will not be a long process because of ... the fragility of the autos."
Lawmakers have said time is running out for the auto giants, and traded blame with auto union chiefs over last week's collapse in the Senate of a short-term 14-billion dollar rescue bill.
The White House has now said it is ready to consider dipping into a 700-billion dollar Wall Street bailout agreed earlier this year to stimulate the economy and end a credit crunch.
But the Detroit Free Press newspaper reported that the size, scope and timing of any lifeline to the automakers was uncertain.
The White House was interested in two conditions, the paper said. The first was a steep reduction by creditors in automakers' debt, the second was requiring the United Auto Workers (UAW) union to take half the money due for a retiree health-care trust fund in stock, instead of in bonds or cash.
The Wall Street Journal reported Monday that the US government was planning a package of between 10 and 40 billion dollars.
According to the size of the deal, the administration may have to seek congressional approval, with the new Congress not set to meet again until January 6 with a boosted Democratic majority following the November 4 elections.
Republican Senator Bob Corker, who was the Senate's pointman for a series of adjustments to the House of Representatives' bailout bill, said the UAW must make pay adjustments.
"Every car they make, they're at a competitive disadvantage because they are disadvantaged by their labor costs," Corker said Sunday.
In turn, auto representatives accused Republicans of seeking to impose unfair wage cuts.
"We need this money ... this low-interest bridge loan to get us through an emergency situation here, an economic downturn," UAW chief Ron Gettelfinger told CNN, accusing Republicans of politicizing the issue by calling for US manufacturers to bring their pay in line with foreign automakers.