The heads of the big three U.S. automakers went before the U.S. Senate Banking Committee Thursday to plead for up to 34 billion dollars in government loans to aid their companies which have been deeply affected by a slump in auto sales.
General Motors Corporation Chief Executive Rick Wagoner admitted his company "made mistakes" but said it was also damaged by what he called "forces beyond our control" -- referring to the global economic crisis. Ford President Alan Mulally said he is taking his company in a "completely new direction.".
The top Republican on the banking committee, Senator Richard Shelby, said he opposes the bailout and doubts the viability of the carmakers' plans to rebuild their businesses. General Motors, Ford and Chrysler are reporting their worst sales in 26 years. GM and Chrysler say they may be out of business by February without government help.
The U.S. auto industry has been damaged by the economic slowdown, tight credit, and gas-guzzling cars with little appeal to buyers.The companies say they will build more fuel-efficient cars including hybrid and electric vehicles. They also promise to re-negotiate deals with workers, lenders, and suppliers to cut costs. Chastised at a November hearing for taking expensive private jet flights to Washington, the auto executives this time drove themselves to the nation's capital.The car companies say a bankruptcy could make the troubled U.S. job market worse.
Thursday, a Labor Department report showed the number of Americans continuing to get unemployment assistance hit a 26-year high of just over four million. Another government report said Thursday that orders to factories fell by the largest margin in eight years in October and the largest U.S. phone company, AT&T laid off 12-thousand workers.
A survey of the leaders of the largest U.S. companies by the Business Roundtable says CEOs expect employment to decline for the next six months.Friday, the government publishes the monthly unemployment rate. Economists surveyed by the Bloomberg financial news service predict the jobless rate will rise to six-point-eight percent. They also expect the U.S. economy will have a net loss of 333-thousand jobs in November.