 Auto firms may step up pleas for help
(China Daily)
Updated: 2008-11-06 07:50  General Motors Corp, Ford Motor Co and US auto-parts makers will greet President-elect Barack Obama with the same plea they have been making for months: We need help from Washington, and fast. "We have a lot of members who are having trouble with the credit crisis right now," said Ann Wilson, spokeswoman for the Washington-based Motor and Equipment Manufacturers Association, which represents suppliers such as Johnson Controls Inc and Lear Corp. "We've got to figure out a way to keep the manufacturing base in this country." The industry's agenda for the new president will be topped by intensified calls for an immediate disbursement of $25 billion in low-interest loans signed into law by President George W Bush on Sept 30. While the money is supposed to be for the development of fuel-efficient vehicles, automakers argue it should be freed up to meet current capital needs. Sympathetic lawmakers also have been calling for auto lenders, if not the manufacturers themselves, to get some of the $700 billion bailout fund set aside for financial institutions. "Time is critical when it comes to availability of capital for this industry," said Dave McCurdy, chief executive officer of the Alliance of Automobile Manufacturers, which represents GM, Ford, Toyota Motor Corp and eight other automakers. Needed right now "That $25 billion is not hitting the street yet, and that's of major import to some of the companies right now," McCurdy said. Automakers and lawmakers are seeking aid amid decade-low auto sales in the US this year and tight credit markets that caused $28.6 billion in first-half losses in 2008 at GM, Ford and Chrysler LLC, owned by Cerberus Capital Management LP. GM said on Nov 3 its October sales plunged 45 percent in what it called the industry's worst month since 1945. Obama said in a speech on Oct 13 that funding for automakers should be on the "fast track", and the government should provide "more as needed." During his campaign, he promised to help keep auto manufacturing jobs in the US with measures such as incentives for building vehicles that use less fuel. The outcome of merger talks between GM and Chrysler also may hinge on whether the companies can get government aid. The negotiations may intensify this week after the election, according to people familiar with the matter. Michigan lawmakers including Representative Joseph Knollenberg started a campaign in October for aid to the auto industry through the Emergency Economic Stabilization Act, which authorizes the Treasury to spend as much as $700 billion to provide liquidity to the credit markets. On Oct 30, six governors from states including Michigan and Ohio sent a similar letter to Federal Reserve Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson, urging them to "promote liquidity within the US auto industry". Last week, GM CEO Rick Wagoner personally lobbied for federal aid in Washington, people close to the discussions said. The Bush administration has confirmed being contacted by automakers. The highest priority for Obama will be to "put the United States on the right track for an economic recovery by fixing the credit markets and restoring consumer confidence," Ford spokesman Mike Moran said in an e-mailed statement. Agencies (China Daily 11/06/2008 page16) |
