More money, more money — Automakers ask Senate for $34 billion

The CEOs from the big three automakers testified before the Senate Banking, Housing and Urban Affairs Committee to discuss their $34 billion bridge loan appeals to prevent their companies from failing.

“Ford is an American company and an American icon….The entire Ford team…is absolutely committed to implementing our new business model and becoming a clean, profitable company that builds the best cars and trucks on the road for our customers,” said Allan Mulally, President and CEO of Ford Motor Company. All three CEOs discusses their plans to implement new business models, cut costs and build better, more fuel-efficient vehicles in the future.

Dr. Mark Zandi, chief economist and cofounder of Moody’s Economy.com discussed how research suggests that if an automaker files bankruptcy, it would cause a loss in consumer confidence and decrease in sales. “I recommend that Congress provides the $34 billion in aid that the three requested…this is necessary given the potential for automakers imminent, disorderly bankruptcy at an extraordinarily fragile time for the economy,” said Zandi. He also estimated that the $34 billion would not be enough money to stabilize the domestic auto industry. The big three “would ultimately need, in my view, somewhere between $75 billion and $125 billion” to avoid bankruptcy, said Zandi.