Auto aid effort stalls

Boardman car dealer Dave Sweeney is among those hopeful a deal can be struck in early December.

STAFF/WIRE REPORT

WASHINGTON — Show us the plan and we’ll show you the money.

That’s the message the Democratic-led Congress gave Detroit’s Big Three automakers Thursday.

With that, bailout-fatigued lawmakers closed up shop for Thanksgiving, leaving the nation’s once-mighty and now foundering car companies scrambling like scolded schoolchildren to finish an overdue assignment in time to salvage their grade.

Only this time it’s their very industry — and the millions of jobs that depend on it — that’s at stake.

“We want them to get their act together. We want them to come up with something,” said Senate Majority Leader Harry Reid, D-Nev.

The deadline is Dec. 2.

That’s when General Motors Corp., Ford Motor Co. and Chrysler LLC have to give Congress a plan for rebuilding and modernizing their industry that’s convincing enough to persuade skeptical lawmakers that they should get a federal lifeline. If they do, Congress might return the following week to vote on a multimillion-dollar loan package.

Then again, it might not.

“Think of us as a venture capital firm,” suggested Sen. Chris Dodd, D-Conn., the Senate Banking Committee chairman. “And we’re asking them, ‘What are you going to do if you get this investment from us?’”

Boardman car dealer Dave Sweeney said it’s frustrating that AIG and Wall Street investment banks received federal funds quickly, but the auto industry has been left hanging.

“I’m surprised they didn’t get something done by now,” said Sweeney, who operates Sweeney Buick Pontiac GMC and Sweeney Chevrolet with his brother, Doug.

The auto industry is the most crucial industry to the nation’s health, he said.

He said he’s hopeful the auto executives and Congress can work out a deal in early December. Until then, the auto industry needs to get back to normal, he said.

“Consumers who need to buy a car should be buying a car,” he said.

Another dealer, Chuck Eddy, led a delegation of Chrysler executives to Washington this week.

He said he returned Wednesday night thinking the industry had a 50-50 chance of getting aid. The dealers explained to House and Senate members and presidential aides that they are local entrepreneurs who employ 140,000 people at Chrysler dealerships alone and pump billions of dollars into local economies.

Failure by an automaker would throw many communities into disarray as job losses at dealerships and auto plants ripple through the economy, the dealers said.

“As we explained the situation, people’s eyes were opened,” Eddy said, who operates Bob & Chuck Eddy Chrysler Dodge Jeep in Austintown.

So far, the auto companies — clobbered by lackluster sales and choked credit — have painted a grim picture of what would happen if they don’t get the aid. GM has said it could go under before year’s end, and Chrysler might not be far behind. Ford has said it can survive through 2009, but it’s unclear how much longer — and if even one company were to collapse, it could cause a cascade and devastate the rest.

The demise of the rescue — at least for now — left the automakers’ fate uncertain, and sent Wall Street spiraling to its lowest level in years. The Dow Jones industrials dropped 445 points, the second straight plunge of more than 400, and hit the lowest point in nearly six years.

Failure of one or more of the Big Three would be another severe blow to the battered economy — and to many Americans’ view of the nation’s industrial strength — and throw a million or more additional workers off the job.

Just Thursday, the government reported that laid-off workers’ new claims for jobless aid had reached a 16-year high and the number of Americans searching for work had soared past 10 million. Congress approved a measure to extend jobless benefits through the holidays, and the White House said President George W. Bush would quickly sign it.

But Democratic leaders scrapped votes on the auto rescue, postponing until next month a politically tricky decision on whether to approve yet another unpopular bailout at a time of economic peril, or risk being blamed for the implosion of an industry that employs millions and has broad reach into all aspects of the U.S. economy.

GM and Ford quickly issued statements promising to submit the blueprint the Democrats demanded.

For now, however, the Democrats said the aid plan lacked the support to pass Congress and be signed by Bush.

Bush and congressional Republicans had balked at Democrats’ suggestion to draw emergency auto industry loans from the $700 billion Wall Street rescue fund. And most Democrats were unwilling to go along with a separate, bipartisan effort backed by the White House to temporarily divert an existing program to help carmakers produce vehicles that burn less gasoline to cover the companies’ immediate financial needs.

Still, Democratic leaders were unwilling to close up shop for the year and appear to be turning a deaf ear to the industry. So they assigned the carmakers homework and said they might yet get their help.