Pelosi appeals for limited aid to auto industry

GM announces more layoffs as debate continues on a bailout.

WASHINGTON (AP) — House Speaker Nancy Pelosi called for “emergency and limited financial assistance” for the battered auto industry Tuesday and urged the outgoing Bush administration to join lawmakers in reaching a quick compromise.

Five days after dismal financial reports from General Motors Corp. and Ford Motor Co., Pelosi backed legislation to make the automakers eligible for help under the $700 billion bailout measure that cleared Congress in October.

In a written statement, the California Democrat said the aid was needed “in order to prevent the failure of one or more of the major American automobile manufacturers, which would have a devastating impact on our economy, particularly on the men and women who work in that industry.”

Administration officials have concluded that the bailout bill that passed earlier does not permit loans to the auto industry, but lawmakers are expected to return to the Capitol for a brief postelection session beginning next week.

Last week, President-elect Obama prodded the Bush administration to do more to help the industry, and on Monday, aides said he raised the issue with President Bush in an Oval Office conversation meant to underscore a smooth transition of power.

Officials familiar with the conversation said the president replied he was open to the idea.

Before adjourning for the elections, Congress passed legislation providing for $25 billion in government-backed loans to the automakers to prod them to retool their factories to make more efficient vehicles.

Since then, executives from GM, Ford and Chrysler LLC and officials in the United Auto Workers union have called for more than that to avert a possible collapse of one of the nation’s most basic industries, including $50 million more to help cover future health care payments for about 780,000 retirees and their dependents.

Pelosi’s statement did not specify how large an aid package she prefers.

Instead, she said she had asked Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, to draft legislation.

A companion effort is under way in the Senate.

Meanwhile, GM said it plans to lay off another 1,900 factory workers at parts stamping, engine and transmission factories in North America as it cuts expenses to deal with a worsening cash crisis.

The nation’s largest automaker said in a filing with the U.S. Securities and Exchange Commission that the layoffs are a result of declining sales.

Spokesman Tony Sapienza said the cuts are in addition to 3,600 factory layoffs announced Friday, bringing the total announced in the past week to 5,500. Those cuts included the layoff of 1,060 workers in Lordstown and the elimination of 50 salaried jobs there.

Sapienza would not say which plants would be affected by the new round of layoffs. GM has 26 powertrain and 22 stamping plants in North America.

The layoffs will be indefinite, he said, but there will be no plant closures.