Automakers on Capitol Hill: Dogpile on the CEOBy Reuters - | Posted 2008-11-19 Email 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.
DOGPILE ON THE CEO
While talk of dealmaking dominated the hallways of Congress, the auto executives at Wednesday's hearings continued to face withering criticism.
One point that several members of Congress hit on was the way the CEOs got to Washington.
Rep. Gary Ackerman, Democrat from New York, noted the irony of the CEOs flying on private jets and "getting off with tin cups in their hands."
"Couldn't you have downgraded to first class or something, or jet-pooled ... to get here?" he asked.
The executives on Wednesday's panel -- GM CEO Rick Wagoner, Ford CEO Alan Mulally and Chrysler CEO Robert Nardelli -- said they flew on private jets. A spokesman said that the head of the United Auto Workers, Ron Gettelfinger, flew commercial.
Rep. Jeb Hensarling, a Texas Republican, also expressed skepticism about helping the industry.
"How do I know that you will not become the next AIG? Twenty-five billion now, $25 billion next month, $25 billion the month after that," Hensarling said.
"What I have not heard is a plan that convinces me that with the $25 billion, that you will achieve sustainability," said Hensarling.
Rep. Judy Biggert, an Illinois Republican, also voiced frustration that Detroit was asking for help while stubbornly making the kinds of cars people didn't want to buy.
"Americans don't want to buy the expensive cars, pay for the high fuel costs and be dependent on foreign oil," Biggert said. "Why should we be bailing you out now, when ... you've really been dragging your feet ... on the kind of cars that ... aren't being made?"
The problems in the autos industry are not limited to the United States.
Reeling from a relentless sales slide, Toyota Motor Corp said it would shut down all of its North American factories for two days next month, while rival Nissan Motor Co Ltd remained pessimistic over the industry's near-term prospects.
Toyota, the world's biggest automaker, had already canceled all U.S. production of slow-selling light trucks for three months this summer. A spokeswoman said production would be reduced further in 2009 at three U.S. assembly plants.
Carlos Ghosn, chief executive of Nissan and Renault SA, speaking separately in Washington, chimed in with his own bleak view of the sector's short-term prospects with a reminder that Nissan was expecting virtually no profit in the October-March second half.
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