Wagoner arrives for Senate hearing in Volt mule
General Motors CEO Rick Wagoner has arrived in Washington to deliver testimony at Senate hearings scheduled for today and tomorrow, and as we reported late yesterday, his transportation this time was not a private jet, but rather a series hybrid Chevy Volt mule in the body of a Chevy Cruze. Ford CEO Alan Mulally also ditched his private plane for a ride down to DC in a Ford Escape Hybrid, while Chrysler CEO Bob Nardelli made the trip in a Chrysler Aspen Hybrid. UAW President Ron Gettelfinger flew down, but on a commercial flight (he never had a private jet in the first place and it likely would've been awkward if he chose one automaker's vehicle over the other two).
Testimony will be given by the four men and a number of other witnesses today and tomorrow, though it still appears as if there aren't enough votes in the Senate to get federal aid for the automakers passed immediately. Even if aid in the form of government loans is approved, there's still the matter of where the money will come from. The only two options on the table are converting $25 billion in already approved loans for investment in green technology to be used by the automakers to keep their businesses afloat, or carving out the money from the $700 billion in aid that Congress has already approved for the financial industry. We'll be keeping an eye on what's happening in Washington today and tomorrow, so stay tuned.
[Photo by Win McNamee/Getty]
Reader Comments (Page 1 of 5)
JZeke 10:34AM (12/04/2008)
OMG just take the money from the Finance bailout!
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Paul 10:41AM (12/04/2008)
Agreed -
Of all people that I agreed with (partially) on this subject was (and my skin is CRAWLING while I say this) Michael Moore...
He pointed out that there never was any question about the financial bailout (oh you make money using other people's money but you lost it and need to stay in business? Here you go!) whereas the auto manufactures were absolutely ASSAULTED (you actually make a product that is starting to sell well/sells more units than any other brand in the world? get lost!).
25 billion to prevent over 100 billion in immediately lost tax revenue? Do it. Get over yourselves and do it.
Ligor 10:46AM (12/04/2008)
seing how they just forked over $700 billion on the financial market without much question, I can't see why the 25billion is such a big deal either
- have someone to make sure they don't just spend the money for nothing as they did from 1990 to 2005, the period of time i feel the big 3 really let donw in their research adn development and allowed themselves to be outdone by the japonese and now even Korea (possibly)
Eddie 10:47AM (12/04/2008)
Agreed. Better yet, it's not a hand-out, it's a loan. So chances are, the government will get the bailout money back in addition to more tax revenue from all of the car production/sales that came after the bailout.
Just do it already.
Serge 10:51AM (12/04/2008)
That is because the "financial industry" has their things plugged really far up the Senate's rear... and if they were to fail and unplug, so to speak, ALOT of poop would leak out.
Unfortunately alot of people don't care about the US auto industry and the fact that it's now making smart decisions and really amazing cars.
But I'm hoping they will help the Big 3 out. I think they are making some of the best products in the industry right now, would be a shame to let them die at this time.
Tim 11:04AM (12/04/2008)
The government will never make money on these loans as they are now structured. Legacy and Debt carrying costs will eat up any faux "profits" for the years. This money will come out of your pocket to the Big 3.
Paul 11:26AM (12/04/2008)
Actually Tim - the money to NOT do this comes out of our pocket.
100 billion (first year, MINIMUM, the industry is saying more like 300 billion) tax shortfall it we dont do it... that means to make up for that shortfall it comes out of your pocket.
100 billion pure loss divide by the fewest working americans in decades or 25 billion in loans divided amongst a larger work force?
It seems obvious to me that one will cost me much less.
BigMcLargeHuge 12:35PM (12/04/2008)
As shown by many posts here, the scare tactics are working. Whatever happens, they will never disappear entirely. But that won't stop the panic that sure to come when the do file Ch11.
The faster they shrink the less it will cost the taypayer in the long run. Improving vehicles is not enough. Market saturation means no matter how good your product is, nobody's buying in quantity period.
The reason for the skepticism of the Big-3s need to stay out of Ch11 is that 10-20% of Big-3 employees or their supporters are going to get laid off anyway during the downsizing in 2009. You're paying $X-billion for them to deliver pink slips to mailboxes in a slower, more polite manner. They could do that instantly at minimal cost under Ch11 protection.
Either way, unemployment rises are a reality that Congress needs to budget for in the next year. The longer the soon-to-be-unemployed sit idle (i.e. producing nothing that is getting sold), the more it costs the taxpayer because of the need to pay their wages as well as accomodating them in an office or factory.
Reality is harsh. There is no happy ending for thousands of auto workers. Soon they will not be auto workers, no matter how this plays out. Its the same story its been for the last year. GM acknowledges the inability to sustain operations at anything like their pre-2008 scale.
Tim 12:11PM (12/04/2008)
Y'all need to read something. They are now asking for 34 billion. It will increase in the next few months.
Gm will need at least 70 billion dollars Chrysler and Ford will need about 40-50 billion. The marketplace has shrunk to about 11 million from 17 million vheicles per year and will prbably rebound to no more than 13-14. The big 3 will continue to lose money as long as they have excess capacity.
Not arguing against a bailout but until they restructure the money will go down a whole. Right now I'd rather see this money going to unemployment benefits.
Paul 12:19PM (12/04/2008)
Tim, the number they want doesn't matter, it will always be less to keep them in business then the tax losses to let them fail. Thats the bottom line.
There is already a separate stimulus propsal for taxpayers that includes bumps in unemployment funding (large ones). It is being fast tracked so it is ready to sign on day one for Obama. Totally different subject.
Silver 1:21PM (12/04/2008)
Wow, a lot of Detroit shills on this thread, arguing the imperative of a bailout.
Since when is the American Way using taxpayer dollars from Joe Q. Public to prop up failed businesses? Detroit is not in trouble because of some natural disaster (though they like to blame the credit crunch). They are in trouble because for years (OK, decades) they have been building sub-par automobiles that the knowledgeable buyer has no interest in. And don't get me started on the ridiculous cross-branding inefficiencies (Tahoe, Yukon, Denali, Escalade, blah blah). If it weren't for the ridiculous big SUV craze in years past, GM and Ford would have been dead a decade ago.
Innovate or die. It's the American Way. Painful at times, but completely necessary.
Propping up these companies with federal funds is not capitalism - it's communism/socialism. And it's a dead end.
Alex 10:35AM (12/04/2008)
who really thinks he drove the car the whole trip?
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WRX09 10:38AM (12/04/2008)
What's the difference? Who cares if he drove or Carl or Sander Levin?
TJ 10:44AM (12/04/2008)
He drove a Malibu from Detroit.
The Volt mule was transported from Detroit.
The Volt Concept/Prepro that will be on display for the presser was already in the area and will be hauled out for showing.
He drove the mule only a few miles to the final destination.
But why does that matter? Really? OMG a private jet! OMG he didn't really drive! OMG faux outrage!
In2uition 10:53AM (12/04/2008)
I'm going to say he did not drive it during the whole trip.
MemphisNET 10:40AM (12/04/2008)
I don't have a prolem with Nardelli coming in a big SUV, but I do have a problem with him coming in a CANCELLED product. Personally I really like the Durango/Aspen twins, especially in Hybrid guise, so this may look bad on his part -- not only because of the 23mpg hwy, but because its a strong image of the walking dead. This is coming from a big Chrysler supporter.
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Frylock350 10:57AM (12/04/2008)
IMO he should have taken a Challenger and pointed out "we still sell this for over sticker".
TJ 11:06AM (12/04/2008)
So what do you propose, a caliber?
MY choice would have been the EVT&C mule, and announced a production date upon arrival...
Although, really, what is more American than a Jeep.
Also of note - location of production:
Malibu - Fairfax KS, Lake Orion MI,
Cruize - Lordstown OH
Volt - Detroit/Hamtramck MI
Fusion - Hermosillo, Sonora, Mexico
Aspen Hybrid - Newark, Delaware (shuttered)
On second thought, I agree that choosing to drive a vehicle built at a plant that has been shuttered is in pretty poor taste... I say either EVT&C or Wrangler EV....
MemphisNET 11:07AM (12/04/2008)
Dealers are setting those prices, not Chrysler.
And as a side note, I have yet to see a Challenger OVER MSRP at any dealership I've visted, and my own R/T was ordered to my liking, and priced to MSRP. The only extra charges were taxes, and normal Ontario 399$ dealer fee's.
Tony2X 11:08AM (12/04/2008)
Then he'd be in danger of lying, the Chrysler dealer near me is offering deep discounts on Challengers including the SRT8s. Not to mention the number of them popping up at Avis and Hertz locations.
Chrysler deserves to fail, GM & Ford at least have some good products either here or on the way.
Is anyone convinced by the ENVI products? Stick an electric motor in a Lotus Europa and call it innovation?
I reckon if Detroit gets government financing, which I am not against, then so should the likes of Tesla and Better Place.