Sen. Adlai Stevenson (D-III.), an avowed opponent of the administration's Chrysler bail-out plan, introduced legislation yesterday to shuttle the proposed $1.5 billion in loan guarantees to other companies that "could make something out of Chrysler's assets."
The bill's introduction comes at a time when the Senate Banking Committee, of which Stevenson is a member, has greeted the Carter proposal with considerable opposition.
In effect Stevenson's measure would allow supposedly more efficient companies to break up and manage parts of Chrysler Corp.
The Stevenson proposal would channel a series of loans, loan guarantees and direct grants to companies other than Chrysler to "reshape" Chrysler's assets and to develop programs to revitalize the company's failing subsidiaries.
Under Stevenson's plan, the first to surface as a formal alternative to the bail-out packages, the Economic Development Administration would be charged with contributing up to $500 million to other companies for retraining grants and other programs.
"The Treasury Department lacks the authorities, tools and mandate to construct such a package." It approaches the Chrysler request -- as did Lockheed's -- on an ad hoc financing basis and not in the context of U.S. industrial strategy."
Stevenson said that, under his proposal, the federal money could be used "for the survivors, rather than the wreck."
Although there is no way to gauge the future of Stevenson's bill, many Senate committee members have raised serious questions about the administration plan, which calls for a $1.5 billion loan guarantee to the struggling company.
"This might just have a chance," Stevenson said in an interview last night. "Committee members do not seem satisfied with either the bail-out plan or the alternative."
The Stevenson plan would give the president the authority to waive certain EDA regulations in order to speed up a response to Chrysler's immediate problems.
"EDA could offer loan guarantees of Chryslerian magnitude -- but to firms with unChryslerian prospects of viability and repayment," Stevenson said.
Meanwhile, former Michigan governor Geore Romney, who has been president of American Motors, said the Chrysler aid package should not be passed unless other federal policies that hamper the auto industry are modified.
Romney called federal auto industry requirements a "conflict in economic policy," citing the costs of various government regulations, "punitive tax policies that limit profits and hamper capital investment, and rising labor costs.
In fact, Romney told the Senate committee it would "not be unreasonable" to force Chrysler employes to accept a wage freeze for a year or more.
Noting that economic troubles also face Ford and General Motors, Romney said Congress should monitor those companies' profits in relation to investment so that Ford, for instance, does not face "comparable domestic difficulty."
In addition, Sen. Paul Tsongas (D-Mass.) considered a swing vote on the committee, said he would not support the adminstration bill unless Chrysler and its employes make "painful" sacrifices.
Stevenson said in the interview that it would be difficult to get votes for his plan because "labor and the administration are putting the screws on."
But Stevenson also said that several committee members have expressed "real anxiety" about the alternatives and are "looking for a way out."
Stevenson said he hoped his proposal would get serious consideration when it came time for the Banking Committee to mark up the Chrysler bail-out bill on Nov. 29.