Automakers still face hurdles to winning U.S. aid
WASHINGTON (Reuters) - Automakers seeking government help return to Congress this week with a new message but facing the same hurdles they failed to clear in November -- a proposal that can be sold to enough lawmakers and a White House long skeptical of bailing out the distressed industry.
General Motors Corp GM.N, Ford Motor Co (F.N), and Chrysler LLC must meet a Tuesday deadline for submitting detailed plans to congressional leaders outlining restructuring efforts and their prospects for survival.
According to one senior lawmaker, the revised campaign for assistance could test the proper role of Congress in corporate affairs and the fiduciary responsibilities public companies have to their shareholders.
The proposals, as ordered by Congress, will center on potential viability rather than the already failed strategy of stressing potential ruin if help is denied. There is still plenty of pressure on lawmakers from labor and management that a refusal to help could lead to massive job losses in the manufacturing sector and broader economic hardship during a time of recession.
"I believe the industry will make a compelling case for bridge loans that will allow the companies to return to firm financial footing," said Democratic Sen. Carl Levin of Michigan.
But industry and congressional insiders stress the same political conditions that led to Detroit's failure in the first bailout attempt still exist.
Automakers, if Democratic leaders decide to reconvene members to vote on their plans next week, would face a sharply divided "lame duck" Congress wary of bailouts following the controversial government rescue of financial services firms.
Senate bailout proponents would still need 60 votes to clear procedural hurdles, a threshold not even tested by majority Democrats for the automakers in November due to weak support and strong Republican opposition.
Also like last time, there would be little time for review or arm twisting to win votes. In addition, car company executives plan to testify before the two committees that they failed miserably to convince the first time around.
Finally, the industry would again face an outgoing White House administration that has strongly resisted a straight bailout. Instead, it has set a high bar and only supports a certain type of funding remedy that many Democrats oppose.
"No one wants to put money -- taxpayers' money -- into a company that isn't viable," Commerce Secretary Carlos Gutierrez said on Monday in an interview with CNN.
Alan Reuther, legislative director of the United Auto Workers, said in an interview with Reuters on Monday that most members of Congress will want to see the plans and that forecasting an outcome was premature.
"The precise form of any assistance package is an open question," Reuther said.
"I think what's clear," Reuther added, "is that there is not time for Congress itself to do a restructuring plan. The issues involved are so complex."
The UAW will recommend Congress approve emergency financing as well as a framework for government to facilitate an out-of-court restructuring of the industry after the Obama administration takes over, Reuther said.
While praising Democratic leaders for making auto companies make a sharper case for help, one leading Republican senator on auto industry issues raised concerns about the more complex role lawmakers find themselves in this time.
"I question your decision that congressional leadership and committees of jurisdiction are best positioned to make determinations about a multinational corporation's future financial prospects," Ohio Republican Sen. George Voinovich wrote on Monday to House Speaker Nancy Pelosi and Senate Leader Harry Reid.
"I also am concerned about how Congress will handle financial information that cannot be disclosed under federal law. Any financial viability plan necessarily must include information that cannot be disclosed to the public due to the fiduciary obligations that management has to shareholders," Voinovich said.
(Editing by Carol Bishopric)
