Lawmakers Still Not Sold on Auto Rescue

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Auto Execs Again Ask Congress for Money

Embattled auto company chief executives scored some points with Congress by driving, instead of flying, to the hearings on a possible U.S. government assistance package.

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"We're here today because we made mistakes, which we're learning from," GM chairman G. Richard Wagoner Jr. told the panel in his opening statement. Although last month's hearings "were difficult for us," Wagoner said, lawmakers' concerns had "accelerated a healthy internal review."

That review apparently produced a far clearer assessment of the rocky road ahead. Instead of the vague request from two weeks ago, this time Wagoner asked for $12 billion in short-term loans, plus a $6 billion line of credit. He said GM needs $4 billion immediately and $4 billion more in January, and hopes to repay the government by 2012.

Nardelli said Chrysler needs a $7 billion bridge loan, as well as immediate assistance for Chrysler Financial, the company's auto financing arm, from the Treasury's financial rescue program, a request that startled Dodd and other lawmakers.

Noting that Treasury has not granted the bailout funds, Dodd marveled: "Even if we do what we're doing up here, Chrysler fails anyway?"

Nardelli declined to answer directly. "It's a candid request," he said.

Ford President Alan R. Mulally, meanwhile, requested a $9 billion line of credit, which he said he hopes never to use. But Ford projects that its needs could grow to $13 billion if the economy continues to decline.

The automakers have already applied for nearly $22 billion from an Energy Department loan program intended to promote development of fuel-efficient technology, bringing their total request to about $60 billion, Corker noted with skepticism. Corker said the Bush administration has rejected those requests; an Energy spokeswoman said the agency has merely asked for more information.

In any case, all three companies have crafted business plans that count on the Energy Department money to help them stay afloat over the next two years. The Bush administration has proposed redirecting that money to provide immediate liquidity. But Sen. Jon Tester (D-Mont.) noted that that idea "totally destroys the business plan."

Tester was one of several senators who said they didn't find the business plans particularly convincing. Neither did Mark Zandi, chief economist at Moody's Economy.com, who testified that the auto giants are likely to need as much as $125 billion "to avoid bankruptcy at some point in the next two years."

Zandi urged lawmakers nonetheless to give the car companies the money, because their "bankruptcy, at this point in time, would be cataclysmic" to the economy. But lawmakers should release the money in two installments, Zandi said, making clear that if the firms' restructuring is not successful, Washington will "work to ensure that there is an orderly bankruptcy process."

Zandi's was one of half a dozen ideas batted around the hearing room. Dodaro urged lawmakers to create an oversight board similar to the one that managed the 1979 Chrysler bailout. Dodd and Sen. Charles E. Schumer (D-N.Y.) promoted the giving some money to a presidential designee -- perhaps Paulson -- who could sit down with the companies, their creditors, their suppliers and the UAW and hammer out a plan. Corker and Sen. Robert F. Bennett (R-Utah) discussed a forced merger of GM and Chrysler, which Bennett said could save up to $10 billion a year.

And Sen. Richard C. Shelby (Ala.), the senior Republican on the panel, said he opposes any bailout, which would "just prop up a failed business model for a few months."

Schumer asserted "there's a growing consensus we have to do something." But he acknowledged that no one is sure quite what that is, even as the Senate prepares to return to Washington on Monday. With opposition to a bailout strong among Republicans and even among many Democrats, congressional leaders have given themselves one week to make something happen.

"Nobody knows the endgame right now," Corker said.

Staff writer William Branigin contributed to this report.