NO means NO - NO $$$$$$$!!!!!
http://news.yahoo.com/s/bloomberg/20081120/pl_bloomberg/am5z0hbbrp0u
GM, Ford, Chrysler Depart From Congress Empty-Handed
John Hughes and Jeff Green John Hughes And Jeff Green – 2 hrs 17 mins ago
Nov. 20 (Bloomberg) -- U.S. lawmakers deadlocked on a plan to bail out the Big Three automakers, leaving General Motors Corp. facing the prospect it could run out of cash before a new Congress can come to the rescue next year.
Democratic congressional leaders disagreed with Republicans and President George W. Bush's administration over how to provide $25 billion in aid to GM, Ford Motor Co. and Chrysler LLC. Only two days remain in a lame-duck session for lawmakers to resurrect a compromise, though Senate Majority Leader Harry Reid said today Congress might return in December to complete its work.
``We are in a situation where we don't know procedurally what we are going to be able to accomplish today,'' the Nevada Democrat said on the Senate floor.
Reid earlier suggested the situation was dire and refused to set aside time today to debate a compromise proposed by Senator Kit Bond, a Missouri Republican. Reid said Bond's plan hasn't been put in writing and the House of Representatives is about to adjourn.
Bond and fellow Republican George Voinovich of Ohio insisted they weren't giving up on their proposal to speed up and broaden access to $25 billion already approved for fuel-efficient vehicle development that was a compromise.
``We've made great progress,'' Bond said. ``We are down to the point now where wording challenges are about the only remaining things to deal with.''
Plunging Shares
GM's German-traded shares fell 7.9 percent to the equivalent of $2.57 as of 11:09 a.m. in Frankfurt. GM has plunged 89 percent this year in New York trading. Ford shares rose 3.2 percent in Germany. The stock has declined 81 percent this year in the U.S.
A Democratic plan to help the automakers with funds from the recently approved $700 billion bank-rescue package stalled in the face of Republican opposition and a Bush veto threat. It may be revived next year after President-elect Barack Obama takes office in January and Democrats install a strengthened majority in both houses.
GM Chief Executive Officer Richard Wagoner said automakers would like action before Obama takes over because a global credit crunch that has slammed sales in the U.S. is spreading to global auto markets.
GM, the biggest U.S. automaker, said Nov. 7 it may run short of the $11 billion minimum cash it needs to pay its bills each month by the end of this year and will fall ``significantly'' short of that level by the middle of next year.
Cash Augmentation
The Detroit automaker burned through $6.9 billion in cash in the third quarter and had $16.2 billion on Sept. 30. Wagoner said yesterday he expects the automaker to slow its cash use to the $3.6 billion a quarter rate of the first half of this year.
``We're continuing to do everything we can to augment our cash position,'' Wagoner said in an interview yesterday after eight hours of testimony split between the U.S. House and Senate over two days.
``We've been stretched to do stuff that we thought was very difficult and painful to do already this year,'' he said. ``People are thinking every day of new ideas.''
Wagoner, Ford CEO Alan Mulally and Chrysler CEO Robert Nardelli left the Capitol after two days of appeals for help were rejected.
The companies are seeking aid as industry-wide sales have plummeted to a 17-year low. GM this month said it lost $4.2 billion in the third quarter and almost $73 billion since the end of 2004.
One Chance for Aid
Senate Republican leader Mitch McConnell of Kentucky urged lawmakers to let automakers shift the previously approved loans intended to promote fuel efficiency for day-to-day operations instead.
``It is the only proposal now being considered that has a chance of actually becoming law,'' he said.
White House spokeswoman Dana Perino endorsed the Bond- Voinovich plan yesterday. ``If the Congress fails to act, the most logical interpretation would be that they don't agree that an additional $25 billion needs to be given to the auto industry,'' she said.
Reid responded that the White House has authority to funnel the financial-rescue money to car companies without congressional action.
``No one should be overly concerned if we are unable to reach agreement,'' Reid said in a statement. ``It will still be up to the White House and the Treasury Department to take the steps that I believe are necessary.''
Environmental Initiatives
``There will be a great deal of resistance in the House'' to redirecting the fuel-efficiency loans without previously approved environmental safeguards, said House Financial Services Chairman Barney Frank, a Massachusetts Democrat.
Wagoner wouldn't rule out shifting the previously approved funds to keep his company afloat. ``It could work,'' he said.
Representatives including Democrats Gary Ackerman of New York and Bradley Sherman of California criticized the auto chiefs for taking private jets to Washington to plead their case.
``Couldn't you all have downgraded to first class?'' Ackerman said. Added Sherman, ``I don't know how I go back to my constituents and say the auto industry has changed.'' The auto chiefs didn't talk about their jet use in response.
Representative Peter Roskam, an Illinois Republican, challenged Wagoner and Mulally to forgo pay for a year, saying he understood Nardelli was agreeable to the idea.
Wagoner said he had ``no position'' on that. Mulally said, ``I think I'm OK where I am.''
Jets and Salaries
The GM CEO got $14.4 million in compensation in 2007, including a salary of $1.56 million. Mulally received $21.7 million for 2007, including $2 million in salary.
Wagoner said he recognizes the government will play a greater role in telling the automakers how to run their business in the future, if aid is approved.
``Certainly at minimum they are going to want to look at your future plans and how are you delivering against those future plans as steward for the taxpayers,'' he said.
``In a certain way, being able to lay out the business issues as we see them, in some sort of setting where confidential data can be shared, I think people would understand our business and maybe that in the end would be helpful.''
The Canadian divisions of all three automakers have asked for loans or loan guarantees from that country's government, the Globe and Mail reported. Chrysler is seeking C$1 billion ($797 million) in aid, the newspaper said, citing people familiar with the discussions.
`Back at the Trough'
U.S. federal aid for the Big Three would remove much of the urgency for tough restructuring decisions, said Representative Michele Bachmann, a Minnesota Republican.
``It's easy to predict that you will be back at the taxpayers' trough in no time at the rate that money is being burned in Detroit,'' she said.
Carmakers are cutting production to cope with declining demand, including a 33 percent reduction in North American output by Ford this quarter. GM said today it's suspending production of cars and trucks in Thailand for a month and cutting 8 percent of the workforce there because of falling demand in Asia.
Wagoner said the trip to Washington taught him that Detroit's plight isn't translating well outside the Midwest.
``What I learned, I think we get out and tell our story pretty well, and then something like this happens and you say `Well geesh' it's like nobody knows what we did,'' Wagoner said in the interview. ``Well, then, it has to start with us. We have to do a better job, a more regular job, of keeping people update, listening to their concerns, trying to respond to them.''
Before calling it quits for the year, the Senate plans to approve a seven-week extension of unemployment insurance benefits that would cost around $6 billion.
To contact the reporters on this story: John Hughes in Washington at [email protected] ; Jeff Green in Southfield, Michigan at o [email protected] .
http://news.yahoo.com/s/bloomberg/20081120/pl_bloomberg/am5z0hbbrp0u
GM, Ford, Chrysler Depart From Congress Empty-Handed
John Hughes and Jeff Green John Hughes And Jeff Green – 2 hrs 17 mins ago
Nov. 20 (Bloomberg) -- U.S. lawmakers deadlocked on a plan to bail out the Big Three automakers, leaving General Motors Corp. facing the prospect it could run out of cash before a new Congress can come to the rescue next year.
Democratic congressional leaders disagreed with Republicans and President George W. Bush's administration over how to provide $25 billion in aid to GM, Ford Motor Co. and Chrysler LLC. Only two days remain in a lame-duck session for lawmakers to resurrect a compromise, though Senate Majority Leader Harry Reid said today Congress might return in December to complete its work.
``We are in a situation where we don't know procedurally what we are going to be able to accomplish today,'' the Nevada Democrat said on the Senate floor.
Reid earlier suggested the situation was dire and refused to set aside time today to debate a compromise proposed by Senator Kit Bond, a Missouri Republican. Reid said Bond's plan hasn't been put in writing and the House of Representatives is about to adjourn.
Bond and fellow Republican George Voinovich of Ohio insisted they weren't giving up on their proposal to speed up and broaden access to $25 billion already approved for fuel-efficient vehicle development that was a compromise.
``We've made great progress,'' Bond said. ``We are down to the point now where wording challenges are about the only remaining things to deal with.''
Plunging Shares
GM's German-traded shares fell 7.9 percent to the equivalent of $2.57 as of 11:09 a.m. in Frankfurt. GM has plunged 89 percent this year in New York trading. Ford shares rose 3.2 percent in Germany. The stock has declined 81 percent this year in the U.S.
A Democratic plan to help the automakers with funds from the recently approved $700 billion bank-rescue package stalled in the face of Republican opposition and a Bush veto threat. It may be revived next year after President-elect Barack Obama takes office in January and Democrats install a strengthened majority in both houses.
GM Chief Executive Officer Richard Wagoner said automakers would like action before Obama takes over because a global credit crunch that has slammed sales in the U.S. is spreading to global auto markets.
GM, the biggest U.S. automaker, said Nov. 7 it may run short of the $11 billion minimum cash it needs to pay its bills each month by the end of this year and will fall ``significantly'' short of that level by the middle of next year.
Cash Augmentation
The Detroit automaker burned through $6.9 billion in cash in the third quarter and had $16.2 billion on Sept. 30. Wagoner said yesterday he expects the automaker to slow its cash use to the $3.6 billion a quarter rate of the first half of this year.
``We're continuing to do everything we can to augment our cash position,'' Wagoner said in an interview yesterday after eight hours of testimony split between the U.S. House and Senate over two days.
``We've been stretched to do stuff that we thought was very difficult and painful to do already this year,'' he said. ``People are thinking every day of new ideas.''
Wagoner, Ford CEO Alan Mulally and Chrysler CEO Robert Nardelli left the Capitol after two days of appeals for help were rejected.
The companies are seeking aid as industry-wide sales have plummeted to a 17-year low. GM this month said it lost $4.2 billion in the third quarter and almost $73 billion since the end of 2004.
One Chance for Aid
Senate Republican leader Mitch McConnell of Kentucky urged lawmakers to let automakers shift the previously approved loans intended to promote fuel efficiency for day-to-day operations instead.
``It is the only proposal now being considered that has a chance of actually becoming law,'' he said.
White House spokeswoman Dana Perino endorsed the Bond- Voinovich plan yesterday. ``If the Congress fails to act, the most logical interpretation would be that they don't agree that an additional $25 billion needs to be given to the auto industry,'' she said.
Reid responded that the White House has authority to funnel the financial-rescue money to car companies without congressional action.
``No one should be overly concerned if we are unable to reach agreement,'' Reid said in a statement. ``It will still be up to the White House and the Treasury Department to take the steps that I believe are necessary.''
Environmental Initiatives
``There will be a great deal of resistance in the House'' to redirecting the fuel-efficiency loans without previously approved environmental safeguards, said House Financial Services Chairman Barney Frank, a Massachusetts Democrat.
Wagoner wouldn't rule out shifting the previously approved funds to keep his company afloat. ``It could work,'' he said.
Representatives including Democrats Gary Ackerman of New York and Bradley Sherman of California criticized the auto chiefs for taking private jets to Washington to plead their case.
``Couldn't you all have downgraded to first class?'' Ackerman said. Added Sherman, ``I don't know how I go back to my constituents and say the auto industry has changed.'' The auto chiefs didn't talk about their jet use in response.
Representative Peter Roskam, an Illinois Republican, challenged Wagoner and Mulally to forgo pay for a year, saying he understood Nardelli was agreeable to the idea.
Wagoner said he had ``no position'' on that. Mulally said, ``I think I'm OK where I am.''
Jets and Salaries
The GM CEO got $14.4 million in compensation in 2007, including a salary of $1.56 million. Mulally received $21.7 million for 2007, including $2 million in salary.
Wagoner said he recognizes the government will play a greater role in telling the automakers how to run their business in the future, if aid is approved.
``Certainly at minimum they are going to want to look at your future plans and how are you delivering against those future plans as steward for the taxpayers,'' he said.
``In a certain way, being able to lay out the business issues as we see them, in some sort of setting where confidential data can be shared, I think people would understand our business and maybe that in the end would be helpful.''
The Canadian divisions of all three automakers have asked for loans or loan guarantees from that country's government, the Globe and Mail reported. Chrysler is seeking C$1 billion ($797 million) in aid, the newspaper said, citing people familiar with the discussions.
`Back at the Trough'
U.S. federal aid for the Big Three would remove much of the urgency for tough restructuring decisions, said Representative Michele Bachmann, a Minnesota Republican.
``It's easy to predict that you will be back at the taxpayers' trough in no time at the rate that money is being burned in Detroit,'' she said.
Carmakers are cutting production to cope with declining demand, including a 33 percent reduction in North American output by Ford this quarter. GM said today it's suspending production of cars and trucks in Thailand for a month and cutting 8 percent of the workforce there because of falling demand in Asia.
Wagoner said the trip to Washington taught him that Detroit's plight isn't translating well outside the Midwest.
``What I learned, I think we get out and tell our story pretty well, and then something like this happens and you say `Well geesh' it's like nobody knows what we did,'' Wagoner said in the interview. ``Well, then, it has to start with us. We have to do a better job, a more regular job, of keeping people update, listening to their concerns, trying to respond to them.''
Before calling it quits for the year, the Senate plans to approve a seven-week extension of unemployment insurance benefits that would cost around $6 billion.
To contact the reporters on this story: John Hughes in Washington at [email protected] ; Jeff Green in Southfield, Michigan at o [email protected] .
