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Saturday, December 06, 2008

U.S. Big 3 Car Makers Are Really Pushed to the Brink

CONTRITE United States auto-maker bosses admitted errors and agreed to strict government oversight, but their pleas to sceptical Senators still won no guarantees of a US$34-billion ($52-billion) bailout.

After top executives of the Big Three car giants endured a sapping near-six-hour grilling :on Thursday, top Democratic Senator Chris Dodd said he would try to mount a last gasp bid to stave off a “death sentence” for the industry.

But President George W Bush said Chrysler, General Motors and Ford must prove their long-term viability if they want government cash, reflecting the tensepolitical sparring over the iconic firms’ fate.

Backers of the bailout warn that the failure of one or more of the top auto manufacturers could severely batter the already reeling US economy and would wipe out millions of jobs which rely on the industry.

“Nothing concentrates the mind like a death sentence,” Mr Dodd said, but cautioned he was not a “miracle worker” and said Congress was not about to simply write a no-strings-attached cheque forUS$34 billion.

It remained unclear, however, whether the votes yet exist to pass a bailout andMr Bush’s intervention cast further doubt on the rescue plan.

“No matter how important the autos are to our economy, we don’t want to put good money after bad,” Bush said.

“In other words, we want to make sure that the plan they develop is one that ensures their long-term viability for the sake of the taxpayer.”

Earlier, the car bosses put on a show of humility at the Senate Banking Committee hearing, after being sent back to Detroit to retool their restructuring plans two weeks ago.

The three men drove small cars on the 845km journey to Washington, rotated driving duties, and ate at a mass market sandwich chain.

They pledged to cut jobs and costs, sell off subsidiaries, shelve unprofitable models and develop cars which run on new generation fuels, and on Thursday offered to submit their restructuring to a federal oversight board.

We’re here today because we made mistakes, and we’re here because forces beyond our control have pushed us to the brink,” GM chairman and chief executive officer Rick Wagoner told the Senate committee.

Ford CEO Alan Mulally added: “Since the last hearing, I have thought a great deal about the concerns you expressed. I want you to know I heard your message loud and clear.

‘Death sentence’ nigh for Big 3 car-makers? [via]

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