DETROIT (Reuters) - United Auto Workers President Ron Gettelfinger said on Thursday that lawmakers need to take immediate action on a $25 billion loan bill to support the U.S. automakers or one or more could fail by the end of the year.
“Inaction is simply not an option,” he said.
A bankruptcy filing by any one of the automakers could take the others with it and would also be devastating to dealers and suppliers.
“If one of the companies go over the cliff, it could take one or more with it,” he said. “The costs that would come from this are just too great.”
Gettelfinger, who testified on Tuesday and Wednesday to U.S. congressional committees in support of the loans, said he would not comment on a possible compromise bill reached by Democratic and Republican senators until details were known.
When told that one detail might be that the automakers would have to provide a strategic plan to get access to the money, Gettelfinger said he would support that.
During his testimony, Gettelfinger said General Motors Corp had the most pressing need for support, followed by Chrysler LLC, which is owned by Cerberus Capital, and then Ford Motor Co.
On Thursday, Gettelfinger said the Bush administration and lawmakers need to take action “now, today,” and he was confident that Congress would be able to reach an agreement.
Gettelfinger said the slow economy, tight credit and declining consumer confidence has put all three automakers in such dire financial situation
“It’s not our fault that the economy is in the tank,” he said. “What we need is a low interest bridge loan to get us through the difficult time.”
GM, Ford and Chrysler are burning through cash amid an extremely tight global credit market that has accelerated the decline in U.S. auto sales to near 25-year lows and placed severe limits on corporate and consumer borrowing.
Shares of GM and Ford jumped on Thursday, rebounding from multi-decade lows after U.S. senators reached a bipartisan agreement on a government bailout for the struggling U.S. automakers.
Without a deal this week, any bailout would likely have to wait until the Obama administration takes over in January. By that time, GM has warned, it would run desperately short of its minimum cash needs.
“There’s a long way to go and a short time to get there,” Gettelfinger said.
Reporting by Nick Carey and Poornima Gupta, editing by Maureen Bavdek, Bernard Orr
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