Automakers on Capitol Hill: Wheeling and DealingBy Reuters - | Posted 2008-11-19 Print
While talk of dealmaking dominated the hallways of Congress, the auto executives at hearings continued to face withering criticism. Connecticut Democrat Christopher Dodd, chairman of the Senate Banking Committee, said it looked unlikely that Congress will come to agreement this week on an assistance package for the auto industry. Automakers across Europe were looking to get their share of government handouts, as industry leaders in Britain, Germany and Italy all made cases for their piece of the pie.
WHEELIN' AND DEALIN'
Democratic Sen. Carl Levin of Michigan, meanwhile, urged the House committee not to let differing views about the source of U.S. automaker loans hold up the aid.
"Are we going to permit a difference over the source of these loans to destroy an opportunity to help an industry so essential to this country?" Levin asked.
Republican Ohio Sen. George Voinovich, whose state could be devastated by a collapse of the U.S. auto industry, said he hopes Congress can reach a deal by the end of Wednesday.
"We are having a lot of discussions with the Democrats," said Voinovich, noting a growing consensus "of getting something done so we don't lose General Motors."
Senate Majority Leader Harry Reid, a Democrat, also hopes the Senate can pass a bill this week.
However, "no one should be overly concerned if we are unable," Reid said.
But investors did seem concerned, as General Motors and Ford shares fell on the uncertainty of the bill's passage. GM closed down nearly 10 percent at $2.79 after hitting a 66-year low of $2.52, and Ford was off 25 percent at $1.26, after hitting a 26-year low of $1.21.
Connecticut Democrat Christopher Dodd, chairman of the Senate Banking Committee, said it looked unlikely that Congress will come to agreement this week on an assistance package for the auto industry.
"I'm anxious to see something happen," he told reporters after a committee hearing on a separate issue. "But frankly, the idea that there's going to be a bill, I think, is remote."
Barclays Capital analyst Brian Johnson said that a viable bill likely would emerge only if elements of restructuring requirements in the proposal before the House were incorporated into the Senate draft.
"Assuming defeat, GM would have to 'run on fumes' until the next Congress and administration, unless Congress were to reconvene in December to address emergency compromise legislation," Johnson said in a note to clients.
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