Bush admin: no immediate emergency automaker aid

By Kevin Drawbaugh

WASHINGTON (Reuters) - The Bush administration would not offer emergency federal aid to the struggling U.S. automobile industry if it encounters severe problems in the next few weeks and Congress fails to extend it some help, said Commerce Secretary Carlos Gutierrez on Friday.

Expressing frustration at Congress' handling this week of the industry's plea for assistance, Gutierrez told Reuters in an interview that the Bush administration strongly supports a bipartisan bill to provide assistance to the automakers by revamping an existing $25 billion Energy Department program.

He called the bill "the only bipartisan solution capable of achieving a majority of the votes. ... I just find it hard to understand why the leadership refuses to support it."

The Senate bill is backed by Michigan Democrats Carl Levin and Debbie Stabenow, Missouri Republican Christopher Bond and Ohio Republican George Voinovich.

Asked if the administration would step in with emergency aid of some sort, possibly a Federal Reserve loan, if the automakers encounter near-term problems, he said: "No ... this is why it's so frustrating that the Congress left town yesterday, because we told them that they shouldn't test us on that, because we are ready yesterday to support this bill."

The chief executives of General Motors Corp, Ford Motor Co and Chrysler LLC testified to two congressional committees this week asking for government aid, but left town empty-handed. Congress has left for the holidays, but may return in December to reconsider the auto aid issue.

House of Representatives Speaker Nancy Pelosi pledged on Friday that support for carmakers would be forthcoming, saying "doing nothing is not an option." She added she was prepared to call the House back into session in December.

Congress gave GM, Ford and Chrysler on Thursday 12 days to come up with detailed survival plans before lawmakers would grant them $25 billion in aid.

Gutierrez said, "We have always supported coming forward with a plan that demonstrates what they're going to do ... a plan that shows they will be a viable enterprise."

The administration expects the plan to include, among other things, information on "the net present value of future cash flows ... their cost structure, their ability to compete, their sales, their market share, their margins," Gutierrez said.

The secretary is the former CEO of breakfast cereal manufacturer Kellogg Co, which is based in Michigan as are the Big Three automakers.

He said, "Ford seems to have a better cash position than the others. And General Motors and Chrysler appear to be in a more difficult time."

He said the companies must decide on their own whether to pursue alternatives such as a possible merger of two of them, or a pre-packaged bankruptcy.

"That has to be their decision. I mean, that's not a government call. If that's the way that they believe they can get to viability, that's their call," he said.

(Reporting by Kevin Drawbaugh, editing by Matthew Lewis)