WASHINGTON–Democratic congressional leaders yesterday said the executives of America's foundering automakers had failed miserably in persuading Congress or the public that $25 billion in aid from the government would be well spent. They gave industry leaders 12 days to come back with a plan showing otherwise.
House Speaker Nancy Pelosi and Senate majority leader Harry Reid said any legislative proposal put to a vote this week would fail, and they levelled scathing criticism at the executives, including pointed barbs for flying to Washington this week on private jets.
The Canadian and Ontario governments are also gearing down any Canadian bailout of the troubled Detroit companies.
"I believe it's our duty to make the right decisions and if we have to take a couple of extra days, or a couple of extra weeks or months to make the right decisions, we're going to do that," federal Industry Minister Tony Clement said yesterday in Washington.
Speaking to reporters on the roof of the Canadian embassy, Clement said Ottawa and Queen's Park must be prudent.
"That's our obligation to the people of Canada and to the taxpayers of Ontario and Canada."
The scathing comments from Pelosi and Reid at a joint news conference indicated that when the auto executives wrapped up two days of hearings here, they had hurt rather than helped their cause. Lawmakers who just days ago had supported providing aid instead said they were now unconvinced that taxpayer money could save the industry from disaster.
Pelosi and Reid called their news conference to pre-empt a gathering of senators from the states with the biggest stake in the auto industry, who said they had forged a bipartisan compromise to speed up access to $25 billion in loans for the automakers that have already been approved by Congress and signed by President George W. Bush.
The congressional leaders said that the House and the Senate would hold hearings during the week of Dec. 2 to consider the plans put forward by the industry. If the plans pass muster, they said, they were prepared to call Congress back in session to consider legislation the following week.
"It's all about accountability and viability," Pelosi said. "Until we can see a plan where the auto industry is held accountable and a plan for viability on how they go into the future, until we see the plan, until they show us the plan, we cannot show them the money. And that is really where we are with this."
Reid said: "Unfortunately, the sad reality is that no one has come up with a plan that can pass the House and the Senate and be signed by President Bush. The executives of the auto companies have not been able to convince Congress or the American people that this government bailout will be its last."
Reid insisted that the Bush administration had the legal authority to aid the auto industry without new legislative action. But the Bush White House has resisted calls to use money from the $700 billion financial system bailout to help Detroit, and there was no indication that the administration's position would change in days ahead.
With General Motors, Ford and Chrysler seeking a proportional amount of that from Canadian governments – likely around $3.5 billion in loans – Clement echoed Washington's new hard line.
"The companies and the unions need to come up with a plan for the industry's long-term success. Now, at some point, governments may decide to be part of that. But let me stress that no one wants to be back to where we are here today one year from now," Clement said.
"The current situation can only be resolved with solid, clear accountable business plans from the automakers and their stakeholders."
Clement also questioned the urgency of the automakers' problems.
"I'm going to go out on a limb here and I'm going to say that I don't think anything horrible is going to happen between now and Dec. 8 when Congress returns."
Economic Development Minister Michael Bryant noted that he and Clement had high-level meetings yesterday with players like Missouri Republican Senator Kit Bond, Tennessee Democratic Representative Lincoln Davis, and senior aides to Pelosi.
"It was important on a day like today ... to get the kinds of meetings that we did get shows the seriousness of our side, but also the seriousness of their side," said Bryant.
"All options are on the table. The only option that's been kicked off the table is a no-strings-attached bailout. That's out."
On Wednesday, Bryant and Clement were in Detroit meeting with senior GM, Ford and Chrysler executives and doing due diligence on whether to rescue companies that have been criticized for poor planning decisions.
In Ottawa, Prime Minister Stephen Harper made it clear the federal government would ride to the rescue only if it makes good business sense.
"We are watching developments in the automotive sector, both here and south of the border very carefully. Any intervention by Canada will only be done if it is in the overall interest of the Canadian economy, and only with sufficient regard to the interests of Canadian taxpayers," Harper told the Commons.
- With files from Bruce Campion-Smith
