Connect with us

Hi, what are you looking for?


Auto chiefs on hotseat in Congress

WASHINGTON, November 18 – The chiefs of the "Big Three" US automakers are set travel to Congress Tuesday to plead with lawmakers to save their talismanic American industry, despite fading hopes for a quick congressional bailout.

The chairmen and CEOs of General Motors, Ford and Chrysler will testify to the Senate Banking, Housing and Urban Affairs Committee as Democrats mount a long-odds bid to pass a 25 billion dollar rescue package.

Their testimony, to be followed by an appearance before a House of Representatives panel Wednesday, comes with millions of jobs threatened as the industry\’s crippling losses are exacerbated by the deepening economic crisis.

Ford CEO Alan Mulally, Chrysler boss Robert Nardelli and Richard Wagoner of General Motors will testify to the committee, under the chairmanship of Democrat Chris Dodd who has already cast doubt a bailout can pass this week.

On Monday, Democratic Senate leaders Congress opened a "lame duck" session vowing to fight for a new 25 billion dollar loan program for the auto industry.

Senior party members condemned the reluctance of the White House and Republican leaders to siphon off the money from a 700 billion dollar finance industry bailout which has already been approved.

Senate Majority leader Harry Reid hit out at Treasury Secretary Henry Paulson for refusing to adapt the huge bailout to aid the auto industry, on which millions of jobs depend.

"All it would take is one stroke of a pen and that problem would be solved," Reid said, as he opened the Senate lame duck session.

"We are seeing a potential meltdown in the auto industry, with consequences that could directly impact millions of American workers and cause further devastation to our economy."

Advertisement. Scroll to continue reading.

But the White House got in a preemptive strike before lawmakers reported for work saying the special rescue funds for banks were not the answer, calling on Congress to adapt an existing 25-billion-dollar auto industry loan program.

"The administration does not want US automakers to fail, and in fact we support assistance to automakers," Bush\’s press secretary Dana Perino said.

But "we believe this assistance should come from the program created by Congress that was specifically designed to assist the automakers,from the 25-billion-dollar Department of Energy loan program," she added.

"This is the appropriate funding to use for automakers rather than seeking an additional 25 billion dollars from the TARP program",the Troubled Asset Relief Program, as the bailout is known.

"The TARP program was never intended by Congress to assist automakers or other sectors of the economy,it was solely intended to deal with what is an ongoing credit crisis in our financial sector."

Democratic leaders would need at least 10 Republican votes to pass the bailout in the Senate and overcome the minority\’s obstruction tactics with a 60-seat filibuster proof majority.

Perino pointed out that any attempt to reopen the TARP program would not make it through the Senate, and said the White House was working with Senate Republican minority leader Mitch McConnell on the issue.

But John Engler, CEO of the National Association of Manufacturers trade association backed plans to tap the finance industry bailout.

"The auto industry is in dire need of relief today, and such relief should be seen as a critical component in our overall effort to restore confidence to consumers and investors, and stabilize the economy," he said.

Advertisement. Scroll to continue reading.

Auto makers have warned that millions of jobs depend on quick federal aid to automakers and have taken out web and newspaper ads warning of the dire consequences of the industry\’s demise.

Wagoner has warned GM needs an infusion of cash in the coming weeks to prevent a devastating bankruptcy at the nation\’s largest automaker and cannot wait until president-elect Barack Obama,who has promised to bail out the sector,takes office in January.

In the new Senate, which takes office in January, Democrats will have at least 57 seats and their numbers could rise further with three races from this month\’s congressional election still undecided.

Click to comment

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...


NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...


NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...


NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...


NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...