Automakers Press High-Stakes Plea for Aid

When Corker raised the prospect of a prearranged bankruptcy with the government offering to help one or more of the firms restructure under court supervision, Wagoner snapped back that the idea is "pure fantasy."

A bankruptcy, he said, "would ripple across this economy like a tsunami we haven't seen. It seems to me like a huge roll of the dice."

The auto companies say a bankruptcy filing would trigger fears that warranties would not be honored and that parts and service would be hard to come by, driving away customers. Suppliers, who count on each of the companies for a huge portion of their business, could be crippled. And there would be no assurance, Nardelli said, that once a company entered bankruptcy protection it would be able to emerge, given the state of the credit market.

Sen. Jon Tester (D-Mont.) asked the executives whether they would be willing to cut their own salaries to $1 a year to avoid that outcome, following in footsteps of Lee Iacocca, former chairman of Chrysler, which received a government bailout in 1979. All three said yes.

"I'm willing to be part of the solution," Wagoner said. Mulally said it would be "a symbolic gesture," because Ford had eliminated merit raises and bonuses for this year.

The automakers may come away empty-handed. At the close of the four-hour hearing, Senate Banking Committee Chairman Christopher J. Dodd (D-Conn.) acknowledged that a Democratic proposal to carve $25 billion in emergency loans out of the $700 billion financial rescue program Congress enacted last month does not have sufficient support to win approval during this week's session of Congress.

The White House adamantly opposes the idea, saying it would raid money needed to stabilize the financial system. President Bush has urged lawmakers to modify and accelerate the existing $25 billion loan program to build fuel-efficient vehicles, but the car companies, House Speaker Nancy Pelosi (D-Calif.) and other key Democrats are unwilling to divert the money from its original purpose.

A test vote on the Democratic measure in the Senate could come tomorrow, but Dodd said he will revisit that idea with Senate Majority Leader Harry M. Reid (D-Nev.). "Trying to jam something through, I think, would be a mistake," Dodd said.

Faced with an apparent impasse and the Thanksgiving break fast-approaching, Reid and Pelosi must decide whether to try again in December or put the matter off until January, when Democrats will have stronger majorities in both chambers of the Capitol, as well as control of the Oval Office.

While Reid and House Majority Leader Steny H. Hoyer (D-Md.) yesterday raised the prospect of a December session, Pelosi told reporters she knows of "no likelihood of us being in session in December."

No action would leave the car companies in a grim position. GM has said it could run out of cash next year, and Nardelli said yesterday the same was true for Chrysler. This comes despite their efforts to produce better, more fuel-efficient cars and to dramatically cut costs by slashing workers, trimming salaries and benefits, and dumping nonperforming assets. Yesterday, Ford continued its campaign, announcing that it would raise about $540 million by selling part of its stake in Japanese affiliate Mazda today.

Mulally noted that Ford had even made a profit during the first quarter of this year.

"What exposes us to failure now is not our product lineup or our business plan or our long-term strategy," Wagoner said. "What exposes us to failure now is the global financial crisis, which has severely restricted credit availability and reduces industry sales to the lowest per capita level since World War II."

Staff writers Kendra Marr and Paul Kane contributed to this report.