Automakers' CEOs to lobby Pelosi on new aid
WASHINGTON (Reuters) - The White House left the door open on Thursday for potentially backing additional financial aid for U.S. automakers as industry executives prepared to lobby U.S. House Speaker Nancy Pelosi for new assistance.
The Bush administration said automakers could now apply for money under a $25 billion package of low-interest loans to help them meet fuel-efficiency requirements but would listen to other ideas as the Democratic-led Congress weighs further loans or other assistance.
The Bush administration has never favored a straight bailout and rebuffed General Motors Corp last week on a proposal for capital to help it facilitate a possible merger with Chrysler LLC, bought last year by Cerberus Capital Management LP.
But White House spokesman Tony Fratto said the administration would keep an open mind amid fresh warnings from industry of a looming financial catastrophe in Michigan without substantial government intervention.
"If Congress intends to provide funding for purposes other than the advanced technology loans, we would need to hear their ideas," Fratto said in an email. "We'll listen if they have ideas on how they would intend to accelerate the availability of funds they have already appropriated -- as long as those funds continue to go only to viable firms."
Automakers are "dialing up" the urgency with manufacturing data showing U.S. auto sales dropping by a third in October and analysts warning that GM and Ford Motor Co will on Friday again report dismal earnings.
The chief executives of GM, Ford, and Chrysler plan to meet with Pelosi later on Thursday, at around 4 p.m. (2100 GMT), to press their case for more assistance.
GM is burning through cash and has said it plans to announce more cost cuts as part of quarterly results. It warned on Wednesday the industry's prospects are dwindling fast due to the "near collapse" in demand for cars, partly blamed on the continuing global credit crunch.
Fratto said the administration had completed a regulatory review late on Wednesday of the technology loan program approved by Congress in September.
That assistance comes with strict conditions and other requirements that industry officials believe will constrain the timely flow of cash at a moment when they cannot wait.
Congressional Democrats are considering steps to ease requirements of the existing loan program or approve a second aid package -- possibly another $25 billion -- that would have few, if any strings attached.
That approach could be part of any broad economic stimulus plan approved during an abbreviated legislative session that would begin in 10 days.
(Additional reporting by Rick Cowan; Editing by Tim Dobbyn)
