U.S. auto execs plead for Congress to fund bailout

By John Crawley and Kevin Drawbaugh

WASHINGTON (Reuters) - U.S. auto executives warned Congress on Tuesday that their industry was teetering on the brink of disaster as they pleaded for a $25 billion aid package despite political opposition to another multibillion-dollar government bailout.

The hearings come as government and business officials around the globe decide if, and how, they should commit billions of taxpayer dollars to bolster struggling automakers.

Rick Wagoner, the head of General Motors Corp, bluntly told the Senate Banking Committee why the executives were there.

"This is about much more than just Detroit," Wagoner said in his testimony. "It's about saving the U.S. economy from a catastrophic collapse."

The hearings came a day after Senate Democrats proposed to bail out the ailing industry with $25 billion in government-backed loans.

The weakened economy and global credit crisis pushed the U.S. government into bailing out companies including insurer American International Group Inc; investment bank Bear Stearns; and mortgage companies Fannie Mae and Freddie Mac.

Wagoner; Robert Nardelli, head of Chrysler LLC; Alan Mulally, CEO of Ford Motor Co; and Ron Gettelfinger, head of the United Auto Workers union all testified on Tuesday.

"While the domestic auto industry has made mistakes in the past, the current problems have been exacerbated by one of the worst economies in nearly three decades," Mulally said.

"We are hopeful that we have enough liquidity based on current economic planning assumptions and planned cash improvement actions, but we know that we live in tumultuous economic times."

The reception from legislators was somewhat less cordial than the well-paid executives are used to.

Sen. Richard Shelby, an Alabama Republican and a member of the committee, has called the automakers "failed models" and said they should file for bankruptcy.

Criticizing the bailout, Kentucky Republican Sen. Jim Bunning said, "The proposal coming before the Senate tomorrow is not a serious one."

PRESSURES AT HOME AND ABROAD

Both GM and Ford shares fell again on Tuesday. In the past 12 months, GM shares have lost more than 90 percent of their value and Ford is down more than 80 percent.

The auto industry in Europe is also under pressure.