Auto executives in spotlight as U.S. weighs bailout
Auto executives in spotlight as U.S. weighs bailout
U.S. automakers should consider executive shake-ups if it would ensure congressional backing for a bailout supporters say is needed to prevent industry collapse, an architect of the effort said on Sunday.
The statement by Carl Levin of Michigan underscored the difficulty Democrats are having in finalizing a rescue plan of up to $25 billion and securing majority support in the Senate, which plans to begin debate on the matter on Monday.
"If it was the difference between getting this kind of support or not, obviously the management should consider resigning," Levin, a staunch industry ally, said on NBC's "Meet the Press."
Levin said he has not been approached on that ultimatum. But some lawmakers have raised the issue and it has factored in a broader national discussion of whether taxpayers should save General Motors Corp, Chrysler LLC and Ford Motor Co.
One influential Republican cited corporate decision-making over the years as the primary reason for Detroit's distress.
"I don't believe they've got good management. They don't innovate. They're a dinosaur, in a sense, and I hate to see this," Richard Shelby, the top Republican on the Senate Banking Committee, said on NBC's "Meet the Press."
Levin, lobbyists and other rescue supporters contend a bailout is justified because millions of factory, supplier, dealer and other jobs are tied to the health of industry.
The companies face bleak liquidity prospects with sales plunging and credit markets choked for corporate and consumer borrowing. Most consumers finance their auto purchases.
GM has said it could run short of cash in early 2009. All three manufacturers reject bankruptcy as an option.
The White House and Republicans who have spoken out on the issue do not unanimously oppose help for Detroit, but there is strong aversion to a bailout.
MANAGEMENT AN ISSUE
Jon Kyl of Arizona, the Republican Senate whip, does not see the chamber approving a straight, $25 billion bailout next week.
"I don't speak for every Republican, but I suppose most of us will oppose it as a very bad idea. This didn't happen to the auto companies overnight," Kyl said on "Fox News Sunday."
Another author of bailout legislation has no plans to make assistance conditional on management changes even though he is not convinced a bailout will pass.
"I'm not sure who I want the new management to be," House of Representatives Financial Services Chairman Barney Frank said on the CBS program "Face the Nation."
Frank, of Massachusetts, and Levin said any legislation on bailout financing would include conditions for auto companies to "show that they can be viable" as well as prohibitions on shareholder dividends or bonuses for senior executives.
An executive branch oversight board would oversee compliance of any aid. The board could veto plans to use bailout money for certain ventures, perhaps overseas investments, and would weigh any matters related to management changes, Frank said.
GM Chief Executive Rick Wagoner, who will testify at House and Senate hearings this week, defended his team but would not discuss resigning in an appearance on Detroit's NBC affiliate.
"I'm not going to speculate on something like that. Let's sort of step back a little. What we have done, what I have done through my career and our executives. We are basically trying to do what is right for General Motors," Wagoner said.
Congress could consider at least two proposals to help Detroit.
Legislation favored by Democratic leadership, Frank and Levin but opposed by the White House would extract up to $25 billion in loans from the Treasury Department's $700 billion corporate rescue program.
The White House and congressional Republicans say any help for Detroit should come out of $25 billion in federal loans approved in September to help it retool factories and make more fuel-efficient vehicles.
U.S. automakers should consider executive shake-ups if it would ensure congressional backing for a bailout supporters say is needed to prevent industry collapse, an architect of the effort said on Sunday.
The statement by Carl Levin of Michigan underscored the difficulty Democrats are having in finalizing a rescue plan of up to $25 billion and securing majority support in the Senate, which plans to begin debate on the matter on Monday.
"If it was the difference between getting this kind of support or not, obviously the management should consider resigning," Levin, a staunch industry ally, said on NBC's "Meet the Press."
Levin said he has not been approached on that ultimatum. But some lawmakers have raised the issue and it has factored in a broader national discussion of whether taxpayers should save General Motors Corp, Chrysler LLC and Ford Motor Co.
One influential Republican cited corporate decision-making over the years as the primary reason for Detroit's distress.
"I don't believe they've got good management. They don't innovate. They're a dinosaur, in a sense, and I hate to see this," Richard Shelby, the top Republican on the Senate Banking Committee, said on NBC's "Meet the Press."
Levin, lobbyists and other rescue supporters contend a bailout is justified because millions of factory, supplier, dealer and other jobs are tied to the health of industry.
The companies face bleak liquidity prospects with sales plunging and credit markets choked for corporate and consumer borrowing. Most consumers finance their auto purchases.
GM has said it could run short of cash in early 2009. All three manufacturers reject bankruptcy as an option.
The White House and Republicans who have spoken out on the issue do not unanimously oppose help for Detroit, but there is strong aversion to a bailout.
MANAGEMENT AN ISSUE
Jon Kyl of Arizona, the Republican Senate whip, does not see the chamber approving a straight, $25 billion bailout next week.
"I don't speak for every Republican, but I suppose most of us will oppose it as a very bad idea. This didn't happen to the auto companies overnight," Kyl said on "Fox News Sunday."
Another author of bailout legislation has no plans to make assistance conditional on management changes even though he is not convinced a bailout will pass.
"I'm not sure who I want the new management to be," House of Representatives Financial Services Chairman Barney Frank said on the CBS program "Face the Nation."
Frank, of Massachusetts, and Levin said any legislation on bailout financing would include conditions for auto companies to "show that they can be viable" as well as prohibitions on shareholder dividends or bonuses for senior executives.
An executive branch oversight board would oversee compliance of any aid. The board could veto plans to use bailout money for certain ventures, perhaps overseas investments, and would weigh any matters related to management changes, Frank said.
GM Chief Executive Rick Wagoner, who will testify at House and Senate hearings this week, defended his team but would not discuss resigning in an appearance on Detroit's NBC affiliate.
"I'm not going to speculate on something like that. Let's sort of step back a little. What we have done, what I have done through my career and our executives. We are basically trying to do what is right for General Motors," Wagoner said.
Congress could consider at least two proposals to help Detroit.
Legislation favored by Democratic leadership, Frank and Levin but opposed by the White House would extract up to $25 billion in loans from the Treasury Department's $700 billion corporate rescue program.
The White House and congressional Republicans say any help for Detroit should come out of $25 billion in federal loans approved in September to help it retool factories and make more fuel-efficient vehicles.