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The leaders of Detroit's struggling Big Three automakers are appearing before the Senatetoday, where prospects of ¥25 billion in emergency loans to the industry appear to be stalling.
Amid GOP cries of "corporate welfare," Senate Majority Leader Reid introduced a bill
yesterday to let the automakers and component suppliers tap into some of the money Congressallotted in the ¥700 billion financial bailout.
Reid, launching a lame-duck session, warned of a "potential meltdown" in the industry withdevastating consequences. He said 355,000 people are employed by the industry and 4.5 millionmore work in related industries. An additional 1 million people, retirees and their relatives, arecovered by retirement and medical plants within the industry, he said.
The Big Three-General Motors, Ford, and Chrysler-have been whipsawed by the falteringeconomy and credit crunch.But the odds do not look good for Detroit. At the heart of the debate is whether automakers aredeserving-as a linchpin of the U.S. economy-or are, in the words of one high-profile critic,Republican Sen. Richard Shelby of Alabama, an innovation-averse "dinosaur".
Shelby, appearing Sunday on Meet the Press, said "Get rid of the management. Get rid of theboards-the people who brought them to where they are today. This is a dead end. It's a road tonowhere, and it's a big burden on the American taxpayer."
Republicans attacked the measure on several fronts. Some questioned the rush to judgment,others warned that other industries would soon line up for help. And some charged that the firmsbrought on their troubles by agreeing to union contracts with wages and benefits costing an averageof ¥73 an hour, compared with¥28 an hour for the average private firm.
GOP Sen. Arlen Specter of Pennsylvania said the ¥700 billion rescue was the No.1 issuedwhen he toured the state recently. "Candidly, the temperature of my constituents was boiling,212degrees Fahrenheit, and the thermometer was broken," he said.
Some opponents prefer that the automakers pursue Chapter 11 reorganizations instead ofhitting up Uncle Sam.
Democrats argue that the ¥25 billion is only 4 percent of the bigger bailout. Reid's
spokesman, Jim Manley, said the bill has robust language on corporate oversight, taxpayerprotections, and executive compensation limits.
A compromise could be struck if Democrats bowed to GOP pressure and, instead of new loans,rewrote the rules for ¥25 billion in loans granted to automakers to help them retool factories to buildfuel-efficient vehicles. "It's mind boggling," one Republican said of Democrats' intransigence. "IfI were them, I' d want to get this off my plate before Obama becomes president."
The automotive executives, Alan Mulatly, Ford's president and CEO, Robert Nardelli,
Chrysler's chairman and CEO, and Rick Wagoner, GM's chairman and CEO, are to appear beforethe Senate Banking Committee. Shelby is the top Republican on the panel.
The post-election lame-duck session is the last chance to sign off on the measure during thisCongress. The bill probably can pass the House, but prospects are iffy in the Senate, whereDemocrats need 60 votes to block an expected filibuster.
If nothing passes, it could be taken up in January by the next Congress, which will have abroader Democratic majority.
Harry Reid proposed a bill for the automakers because ( ). A.GOP called for "corporate welfare"
B.the leaders of the Big Three came to Senate to stall the loans
C.the breakdown of American auto industry will affect millions of people's life
D.¥700 billion emergency loans is to be tapped into
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