US auto industry bailout: In the firing line

19 November 2008

New York: Lawmakers at the US Senate began the first of two days of hearings into a plea by US automakers to be granted a financial lifeline with an intense grilling of auto firm executives. The session saw executives being castigated for short-sighted business strategies, and also recognition of the central position of the industry in the country's economy.

The US auto industry has been lobbying hard for a $25 billion loan from the $700 billion bailout fund created for the finance sector.

"Their board rooms in my view have been devoid of vision," said Sen. Christopher Dodd, D-Conn. "They have promoted and often driven the demand of inefficient, gas guzzling vehicles, and dismissed the threat of global warming." Dodd is chairman of the Senate Banking Committee.

One Republican lawmaker, Sen. Michael Enzi of Wyoming, said he was uncertain a bailout would work. "We have little evidence this $25 billion will do anything to promote long-term success," Enzi said.

On the other side of the room, the head of the United Auto Workers union, testifying side by side with the CEOs of the industry's Big Three, said the failure of one company would also impact confidence in the other two.

"If one of these companies goes into bankruptcy, I'd be willing to bet it takes two, or possibly all three, with them," said Ron Gettelfinger, president of the autoworkers' union, said during questioning.