Relief, anger, fear greet autos bailout in Detroit

WARREN, Michigan (Reuters) - News that the Bush administration had provided emergency loans to struggling U.S. automakers was welcomed in the Detroit area on Friday.

But mixed with relief was fear about what fresh pain will accompany the bailout and anger it took so long to get help.

"I'm glad we got help from the government," said Steven Haughton, an inspector at Chrysler's Warren truck plant, shielding his face from the driving snow of a winter storm. "But the government dragged its feet way too long."

"I didn't see Congress hesitate when it came to bailing out the banks in the Fall," he added.

From the Warren truck plant, which makes Dodge Ram and Dakota pickup trucks, on a clear day you can see No. 1 U.S. automaker General Motors Corp's monolithic headquarters in downtown Detroit, the birthplace of the automobile.

Official reaction was overwhelmingly positive from local politicians to the $17.4 billion in loans that U.S. President George W. Bush announced to help stave off collapse of an industry pummeled by the credit crunch and decades of what critics have lambasted as poor management decisions.

"The auto industry is the backbone of American manufacturing, and the ripple effects of bankruptcy would have touched communities and families all across our nation," Michigan Governor Jennifer Granholm said in a statement.

Two of Detroit's Big Three -- GM and Chrysler, owned by private equity firm Cerberus Capital Management LP -- are in dire need of the loans. Ford Motor Co said it has enough cash to get by without a loan for now.

The Big Three are the eroding core of the economy in Detroit and Michigan. The state has lost 300,000 manufacturing jobs over the past eight years, many of them in auto industry.

There has been growing fear here in recent weeks that no bailout would mean the collapse of automakers, wiping out many suppliers and devastating the local economy. So relief was also evident among auto parts suppliers.

"It's fair to say that we are very pleased that they finally reached a decision," Andrea Puchalsky, director of corporate communications at seating and electronics maker Lear Corp, said of the administration's loans.

MORE CONCESSIONS?

But from the region's auto workers the favorable reactions were muted. The once-dominant but now shrunken United Auto Workers (UAW) union was an oft-cited target of Congress and administration officials during weeks of bailout debate.

Apart from anger at what they said was a different set of standards applied by the government in bailing out Wall Street banks compared to the ailing auto industry, workers trudging through the snow at the Warren plant said they were concerned the emergency aid would not be enough to save the industry.

"The loans should keep us alive for a while," said Roy Watkins, 45, a team leader at the plant. "But I don't think it will solve all of the automakers' problems."

Watkins said he was afraid conditions that the Bush administration included in the loans tied to cutting labor costs meant workers would have to make more concessions. The UAW made what were seen as landmark give-backs on healthcare and other issues in a new contract with automakers in 2007.

"We've already made so many concessions," he said. "What other concessions can we make? What have we left to give?"

The UAW wants to work with the incoming administration of President-elect Barack Obama to reverse those conditions. But many workers on Friday said they felt resigned.

"I guess we'll have to make concessions," said Linda Tinch, an inspector, shivering in the biting wind. "I don't care any more. What choice do we have anyway?

Steven Haughton said he didn't much mind either. "As long as they don't mess with our healthcare, I'm fine," he said.

But Edward Bedwell, a metal repairman, said UAW-represented workers' best chance of keeping their wages and benefits was hanging on for Barack Obama to take office.

"Obama will help us more than Bush," he said. "We'll still have to make concessions under Obama, but he cares about us more than Bush does."

(Editing by Peter Bohan; Editing by Gary Hill)