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US Automakers Pledge Restructuring in New Bid for Loans

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U.S. automobile companies suffered additional sharp losses in November, underscoring the threats facing the industry amid the U.S. recession.  As VOA's Dan Robinson reports, the big three U.S. automakers have submitted details of their plans to restructure, in response to demands from members of Congress.

In its submission to Congress, Ford Motor Company says it will invest $14 billion in fuel-efficient technologies during the next seven years, while asking Congress for a $9 billion line of credit to help stabilize its operations.

The proposal comes ahead of a second appearance by auto executives before Senate and House committees on Thursday and Friday - testimony they hope will persuade Congress to approve emergency legislation for $25 billion in loans.

In those hearings, Ford, General Motors and Chrysler are expected to pledge other steps, such as renegotiating debt, cutting executive salaries, and selling corporate aircraft.

House of Representatives Speaker Nancy Pelosi said Tuesday that lawmakers are examining automaker proposals already in hand from General Motors and Ford, and she repeated Congress's insistence that the car companies demonstrate they can be viable.

"The industry must show how it will innovate and prepare to take the companies into the 21st century," she said.  "It's about viability of the industry, it's about accountability to the taxpayer and it's about innovation for the future."

In its written submission, Ford said it hopes to be able to transform its operations without having to access a potential $9 billion government bridge loan, if one is approved.

Ford says it is working on improving the fuel efficiency of its cars, reducing the number of its U.S. dealerships and negotiating with the United Auto Workers union on ways to help it compete with foreign carmakers.  

If auto executives can persuade Congress that they are taking needed steps, House Speaker Pelosi said congressional leaders could call lawmakers back into session to consider legislation.

However, although Pelosi said she would like to see this happen, she did not commit to such a session, and repeated her assertion that the Bush administration has authority to use funds from the $700 billion financial rescue plan to help U.S. automakers.

More bad news for car companies arrived on Tuesday in the form of sharp declines in sales numbers.

Ford said its sales of light vehicles in November dropped 31 percent, while General Motors reported a 41 percent decline for the month.  They were not alone as Toyota and Honda reported U.S. sales declines of 34 percent and 32 percent.

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