Date: 12/14/2008 9:08 PM
BC-Meltdown-Autos,5th Ld-Writethru/814
Eds: UPDATEs with Bush quotes. AP Video. Moving on general news and financial services.
WASHINGTON (AP) — The White House tossed out no lifeline for the teetering auto industry Sunday, although President George W. Bush reiterated that he was considering using money from the $700 billion financial bailout fund to provide loans to the carmakers.
“An abrupt bankruptcy for autos could be devastating for the economy,” Bush told reporters Monday aboard Air Force One during an unannounced trip to Iraq and Afghanistan. “We’re now in the process of working with the stakeholders on a way forward. We’re not quite ready to announce that yet.”
Bush wouldn’t give a precise timetable but said, “This will not be a long process because of the economic fragility of the autos.”
White House officials said they did not expect to make an announcement Monday. The administration is considering ways to provide emergency aid to General Motors Corp. and Chrysler LLC, which have said they could run out of cash within weeks without federal aid.
Sen. Bob Corker, R-Tenn., who blocked legislation that would have provided $14 billion in loans to the automakers, said he had spoken with the White House early Sunday. “I don’t think they yet know what they’re going to do,” he said. Ron Gettelfinger, the president of the United Auto Workers, said the union had not held discussions with the White House.
The aid is expected to benefit General Motors and Chrysler and discussions involve the amount of funding and any potential conditions. Ford Motor Co. has said it has enough cash to survive 2009 but asked Congress for a line of credit in case the financial markets deteriorate further.
“I’m optimistic they’re going to do something significant. I don’t think the White House wants bankruptcy at one of the Big Three automakers as part their legacy,” said Sen. Sherrod Brown, D-Ohio.
Last week, Congress failed to approve a plan that would have provided short-term financing to the industry and create a “car czar” who would ensure that the money would transform the Detroit automakers into competitive companies.
The administration, following the legislative defeat, said it was considering several options, including using money from the $700 billion financial bailout fund to provide loans to the carmakers.
Corker and other Republicans sought a compromise that would have insisted the carmakers restructure their debt and bring wages and benefits in line with those paid by Toyota, Honda and Nissan in the United States. The legislation died when Republicans demanded upfront pay and benefit concessions from the United Auto Workers that union leaders rejected.
Corker urged the White House to seek similar concessions from the auto companies and their unions in return for the money. “Of course, the benefit they have — they don’t have to negotiate. They can say this money is available but it’s only available under these conditions,” he said in a broadcast interview.
Sen. Debbie Stabenow, D-Mich., c
ountered that Republican leaders in the Senate did not want an agreement and said the loans were needed to buy time for the companies to restructure.
“Manufacturing is on the edge in this country. This is not the time for a political agenda,” Stabenow said.
The UAW’s Gettelfinger said the failure of the legislation showed that Congress should stay “away from the bargaining table.”
The administration has several options. It could tap the $700 billion financial rescue bailout fund to provide loans to the carmakers or use part of that fund as a kind of collateral for emergency loans the automakers could get from the Federal Reserve.
The administration also could do nothing, leaving open the possibility that one or more of the automakers could go bankrupt.
The White House is keeping President-elect Barack Obama and his advisers informed of the discussions. If administration officials choose not to provide the money now, the Obama team could wait for the new Congress, which will have stronger Democratic majorities.
Providing aid to the companies could represent a change for the White House, which has previously insisted that the Wall Street rescue plan should be used solely to help financial institutions.
Gov. Jennifer Granholm, D-Mich., said other countries were providing aid to their automakers and the loans were essential to help make the U.S. less dependent on foreign oil.
If the companies don’t get help, “we’ll be replacing our reliance on foreign oil with a reliance on foreign batteries because it’s going to be the battery that’s driving the electric vehicle in the future,” Granholm said.
Corker was on CBS’ “Face the Nation,” as was Brown, and “Fox News Sunday,” where he appeared with Stabenow. Gettelfinger was on “Late Edition” on CNN. Granholm was on “Meet the Press” on NBC.
Copyright 2008 The Associated Press.
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On Friday, to paraphrase Michelle Obama, for the first time in my adult life, I thought George Bush was a patriotic. Why? The White House’s suggestion to save the American automobile industry. It appears my bipartisanship was premature. See the below AP story. Let us cross our fingers that the likes of Sen. Bob Corker, R-Tenn (quoted below) haven’t convinced George Bush he should side with the Japanese auto industry instead of Detroit. I know as a Texas patriot, Bush would certainly remember the Alamo. But what about remembering Pearl Harbor, Auschwitz and the Great Depression?
My son and I just saw the movie The Day the Earth Stood Still. The thought I shared with my son after watching this movie with the plot that humans must be exterminated to save the planet, was that perhaps AIG and its credit default swaps would ultimately save the Earth from mankind.
If General Motors fails, it could more effectively than any other theory postured by Al Gore, put an end to global warming. The short term reason is that our American cars would over a fairly short period of time, stop running. See Thursday’s blog. That could have a midterm significant impact on energy conservation in that those American cars are less efficient than foreign cars. But the long term impact is far greater than that. A GM bankruptcy is followed shortly by spiraling unemployment and tightening credit. When you abandon your American car because no one knows how to fix it, you won’t be able to replace it since your job will be at risk and no bank will lend you the money. Thus, a huge drop in the number of cars and oil consumption.
That could be construed as a good thing if you didn’t figure in that the World Economy is fueled by American consumption. Money is just a fictional barter medium (it is only paper after all) that has no intrinsic value. Yet, the world has abandoned its agrarian roots for urban based manufacturing and consumption, all in pursuit of this fictional barter token. Demand for Western Products has created an immense migration to Asian and other third world cities, where no one will have jobs should rampant unemployment follow a drop of American demand for such products. There are fourteen cities in China alone with populations over 3.6 million people. (Can you even spell more than two Chinese cities?)
Human’s need shelter, we need heat and we need fuel. The rest is all a delusion. If you remove the fuel from the world economy that is American’s belief that they need cars, computers, videos games and TV’s – the economies of Asia will collapse. Should American’s stop buying, hundreds of millions of people will be in desperate straights in Asia.
While things will take a while to get as bad here, how much food are you capable of growing on your little plot of soil on your condo balcony? Could you keep yourself warm by foraging for wood? The people of Stalingrad did not do so well in such a venture.
I’ve had a vision that we could create Green jobs to replace our excess demand for cars. In my vision we could replace some of our production capacity for cars with the production of windmills, solar panels and an improved energy grid. Yet, if the American economy (and tax structure with it) collapses in the next few months, there will be no way to fund a transition to Green. Taxes require jobs and profits. George Bush was right to save the banking industry, but not because it has any inherent value, but because it allows people to buy the houses and the cars, the things that the UAW and other American workers make. As the financial system implodes and the jobs dependent entirely on the illusion of wealth disappear, we must have jobs where tangible things are made, in the United States.
Lose the American automobile industry and you have put our species on the precipice. If the survival of billions of human beings on this planet is a priority, then be a patriot, George Bush and make me proud of you this once.