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.

Dr. Mark Zandi, chief economist and cofounder of Moody’s Economy.com, discusses how he estimates the total cost for the automaker bailout at a testimony in front of the Senate Banking, Housing and Urban Affairs Committee (1:54)

 

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Jim Press, President and Vice Chairman of Chrysler LLC defends the integrity of his company. (0:52)

 

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Chrysler LLC held a rally at an auto dealership in support of their proposed automaker bridge loans. The rally was attended by people affected by the entire auto industry, from the president of Chrysler, to dealers, industry partners, and local businessmen who are dependent on customers that dealers bring to their area.

“We sell an average of 25,000 cars a year to Marlyand residents. The sales tax alone generated on these vehicles over $30 million a year,” said Tammy Darvish of the Darcars Automotive Group, a car dealership group in Maryland and Northern Virginia. “We have 233 local businesses and vendors with whom we do over $83 million a year of business with…these are examples of where the pain would really be felt if manufacturers who provide us vehicles were not provided the much-needed support from Congress.” Darvish emphasized that communities and stories like hers can be told across the country. “We are the backbone of the American economy, and there is no other industry stronger or more united in good times or in bad times than all of us automotive dealers here today,” said Darvish.

This rally isn’t about “Wall Street or board rooms…this is main street, this is jobs, this is preserving our way of life,” said Jim Press, Vice Chairman and President of Chrysler. “This isn’t a business of a couple people flying around on jets,” said Press, “Chrysler is…a company that has made the way of life we enjoy.” Press said that if one of the automaker companies went under, it would have a ripple effect throughout the entire economy. “I flew Southwest to come here, I took the train from Philadelphia…I’m in a town-and-country van to go to Washington,” said Press.

The Democratic leadership from the House and Senate held a press conference to announce that since the auto industry has failed to convince Congress that their suggested rescue plan will not be their last request, there will be no agreement on a bailout this week. However, the CEOs from the Big 3 automakers will have another opportunity to make their case to Congress

“We’re requesting that they submit a plan to Congress through Chairman Frank and Chairman Dodd no later than December 2nd. These two very able men will review the plan if necessary hold hearings during the week of December 2nd to fully vet the auto industry’s proposal,” said Senate Majority Leader Harry Reid (D-Nev.).

Reid stated that Congress was prepared to come back in session the week of December 8th, but only if the Big 3 auto makers submitted a plan that will provide accountability.

“Until we see a plan where the auto industry is held accountable and a plan for viability on how they go into the future…we cannot show them the money,” said House Speaker Nancy Pelosi (D-Calif.).

Pelosi went on to reject the calls that have been made for the automakers to declare bankruptcy.

“This is our response to those who would say ‘let them go, let them go and deal with it after that’. This is an important industry in our country and we intend to save it. We can only do this if we work together and the auto industry has to come up with a plan for innovation, accountability, and viability,” said Pelosi.