Top executives from troubled U.S. automakers (General Motors, Ford and
Chrysler) have warned of dire consequences if they do not receive 25
billion dollars in federal aid.
The chairman of General Motors (Rick Wagoner) told a
Senate committee hearing Tuesday that if domestic automakers go
bankrupt, it would have a "catastrophic" effect on the nation's
He warned that hundreds of thousands of jobs would be lost.
Auto executives said their companies have been adversely affected by
the global financial crisis and the resulting decrease in consumer
spending. But some U.S. senators said the companies' financial troubles
are largely due to internal management problems.
Congressional Democrats want to use some money from the 700
billion-dollar economic rescue plan to help the carmakers, but Senate
Republicans and the Bush administration oppose the idea.
They say the
automakers should get their finances in order by using a
previously approved loan from the Energy Department. That 25
billion-dollar loan was meant to help automakers retool to build more
Speaking at a separate hearing
earlier in the day, U.S. Treasury
Secretary Henry Paulson opposed the Democrats' plan to use an
additional 25 billion dollars from the rescue package to help the auto
industry. He said the rescue plan should remain focused on the critical
stabilizing the financial system by buying stock in troubled banks.
Senate vote on the Democrats' 25 billion-dollar rescue plan for
automakers -- which also includes an extension of unemployment benefits
-- could come as early as Thursday. But aides in both political parties
say the plan does not appear to have enough support to pass.