Quarrel over car firm bailout

Ford, Chrysler, and General Motors are desperate for financial aid after falling US sales and growing losses have hit the three largest US auto makers hard, and Democrats and Republicans are clashing over where the money should come from. ┬á Congressional Democrats gave proposals yesterday giving seven to 10-year loans to domestic automakers and their suppliers amounting to $25 billion, with the money coming from the $700 billion bank rescue package. ┬á While both parties agree that aid for the auto industry is necessary, the Bush administration and Congressional Republicans are opposed to using the money from the Troubled Asset Relief Program to make the loans, and say the funding should come from money approved to develop more fuel efficient vehicles. ┬á White House spokeswoman Dana Perino reiterated criticism yesterday that the DemocratÔÇÖs proposal wouldnÔÇÖt force automakers to improve and would divert funds set aside to strengthen financial markets. ┬á ÔÇ£WeÔÇÖre surprised that Senate Democrats would propose a bailout that fails to require automakers to make the hard decisions needed to restructure and become viable,ÔÇØ Perino said in an e-mail. The statement said that the DemoncratÔÇÖs plan would lead to a ÔÇ£raidÔÇØ on money ÔÇ£needed to stabilize our financial system and encourage new lending to help our economy.ÔÇØ ┬á Republican Senator Richard Shelby said yesterday on Bloomberg Television that he doesnÔÇÖt support a bailout ÔÇ£under just about any circumstances.ÔÇØ He said,ÔÇØ The fundamental problem is the management, the products, the lack of possibility, the contracts they have entered into.ÔÇØ ┬á Tennessee Republican Senator Bob Corker told reporters he was skeptical about the aid package, and that to reorganize in bankruptcy may be better for the companies. ┬á All three automakers have rejected bankruptcy as an option, and have expressed urgency for government support in order to avoid further financial crises. ┬á Ron Gettelfinger, president of United Auto Workers said itÔÇÖs not just about the three large car manufacturers. ÔÇ£ItÔÇÖs about thousands of small and medium-size businesses-employing millions of workers-that provide parts, logistics, research, engineering and other goods and services,ÔÇØ he said. ┬á The auto makerÔÇÖs CEOsÔÇÖ Alan Mulally of Ford, Robert Nardelli of Chrysler, and Richard Wagoner of General Motors are scheduled to testify today at a hearing held by Senate Banking Committee Chairman Christopher Dodd, and will make their case tomorrow at a hearing in the House.