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AUTOMAKERS

The Big 3 make another pitch

Having learned their lesson last month, a chastened group of automakers again approached Congress for a bailout. Whether they will get it remains unclear.

dlightman@mcclatchydc.com

Detroit's Big Three automakers were humble, contrite and specific Thursday about why they need $34 billion in federal help quickly -- but their bid still faces an uncertain future in Congress.

The executives, chastised by lawmakers last month for appearing insensitive and greedy, tried hard to say all the right things during a six-hour Senate Banking Committee hearing.

''We're here today because we made mistakes which we're learning from, because forces beyond our control have pushed us to the brink,'' said Rick Wagoner, the chairman and chief executive of General Motors.

He was joined by Robert Nardelli, Chrysler's chairman and chief executive, and Alan Mulally, Ford's president and chief executive. They struck similar notes.

''It used to be that our approach to our customers was: If you build it they will come,'' Mulally said. Not anymore.

''I want you to know,'' he told the senators, ``I heard your message loud and clear.''

However, with many constituents still signaling reluctance to back the aid and no consensus on how to proceed, senators were generally sympathetic but not necessarily ready to act.

Committee Chairman Christopher Dodd, D-Conn., said after the hearing that while most of his colleagues think inaction is not an option, finding agreement in just a few days -- Congress doesn't want to meet beyond next week -- ``is a tall order.''

`NOT A VIABLE OPTION'

He was heartened by views such as those of Sen. Charles Schumer, D-N.Y. ''Bankruptcy is not a viable option because it will seal the death of the auto companies,'' Schumer said. GM and Chrysler face bankruptcy soon unless they get help.

Many Republicans, though, remained skeptical.

Sen. Richard Shelby, R-Ala., the committee's top Republican, questioned why last month the companies sought $25 billion but now want $34 billion, and was concerned that the money would ``prop up a failed business model for a few months.''

Congressional leaders have called Thursday's hearing, and another Friday before the House Financial Services Committee, as crucial in gauging support for any help.

Several thorny issues still need to be resolved.

One is oversight. 'I don't trust the car companies' leadership,'' Schumer said. ``I worry if they're left on their own, they'll be back a short time later asking for more and we won't be better off.''

OVERSIGHT BOARD

Senators talked about an oversight board, similar to the one that kept a close watch on Chrysler when it got loan guarantees from Washington in 1980. That board was headed by the Federal Reserve Board chairman and included three Cabinet secretaries and the comptroller general. The loans were repaid with interest.

Car company executives agreed Thursday that the government could again have authority to manage any restructuring of the company's business plan, including employment, product lines, financial management and strategy.

Also complicating the outlook is the Bush administration's refusal to authorize tapping the $700 billion financial rescue fund, passed in October, to help the companies immediately.

Another factor inspiring legislative hesitation is the issue of how much the car companies will eventually need. Mark Zandi, chief economist at Moody's Economy.com, estimated that automakers would need at least $75 billion to $125 billion to avoid bankruptcy.

He based that estimate on projections that sales would remain depressed for some time, unemployment would stay high and demand for autos has been satisfied with sales incentives of recent years. The executives would neither agree nor disagree with Zandi's numbers.

EARLIER EFFORT

Efforts to help the industry collapsed last month as lawmakers complained that the executives' style and testimony made it difficult to sell voters on the idea of giving them aid.

They flew to Washington on separate corporate jets to ask for a taxpayer bailout, and they couldn't specify what they'd do with the money if they got it.

On Thursday, they presented new detailed business plans, agreed to take a dollar a year in salary and drove to the hearing in fuel-efficient cars. They appeared side-by-side with Ron Gettelfinger, the United Auto Workers president, who backs federal help and pledged to keep negotiating with the companies.

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