Detroit's automakers appealed to congressional leaders Thursday for $25 billion more in federal loans, low-interest emergency borrowing and a share of the Wall Street bailout to help rescue an ailing industry battered by the economic crisis.
The talks with House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., came as General Motors Corp. and Ford Motor Co. were poised to announce billions more in losses and further job cuts Friday.
GM, Ford and Chrysler LLC pledged to work with the leaders "to ensure immediate and necessary funding to keep the auto industry viable and its transformation on track during this critical time," according to a GM statement.
In an interview with The Wall Street Journal before the meeting, Pelosi said Democratic leaders are considering several options to help the industry, including tax credits to encourage the purchase of new vehicles and additional financing beyond the $25 billion in loans approved by Congress in late September to help the companies retool plants to build more fuel-efficient cars.
"We have an industry -- forget the companies -- an industry in our country that is at risk," Pelosi told the newspaper. "Whatever we may think about the poor choices made by the companies, the industry is important to our country. The fate of the workers, their jobs, their health, their pensions, are important to them and to our economy."
Pelosi said in a statement that they discussed "how to protect hundreds of thousands of workers and retirees, safeguard the interests of American taxpayers, and use cutting-edge technology to transform blue-collar jobs to green-collar jobs for generations to come."
A person familiar with the discussions, who declined to be identified because the meeting was private, said the executives discussed a variety of legislative and funding options but there was no agreement on a specific course of action.
GM said the additional federal support would allow "a competitive" auto industry "to contribute to our nation's economic revival." The executives, who were joined by the president of the United Auto Workers, declined comment to reporters between the private meetings.
The executives -- Chrysler's Bob Nardelli, Ford's Alan Mulally and GM's Rick Wagoner -- and union president Ron Gettelfinger sought an additional $25 billion in federal loans for future health care payments for retirees. They also want lawmakers' help in winning access to the $700 billion financial bailout being run by the Treasury Department and to low-rate emergency borrowing from the Federal Reserve's discount window, used in normal times by banks.
Reid, D-Nev., said the Bush administration "should exercise its existing authority to provide additional help to these firms and all parties strongly encourage the administration to exercise that authority."
The loans would help the companies make required payments to health care trust funds that were created as part of a 2007 labor deal.
Congress approved $25 billion in low-interest loans for domestic automakers and suppliers to retool plants to build fuel efficient vehicles. But congressional allies of the industry have said the money will not be available quickly enough to help.
Rep. John Dingell, D-Mich., a longtime advocate for the industry, said the meeting was productive but he did not address the specifics of the industry's request.
"They're not seeking money just to spend it," he said. "They're seeking money to invest in jobs and opportunities for American workers and American industry."
U.S. auto sales declined to their lowest level in more than 17 years last month, leading some executives to predict dire consequences if the economy did not improve. The companies want Pelosi to included the new money in an economic aid plan if the House returns for a postelection session.
Gettelfinger said Treasury and the Fed could provide liquidity to automakers "so they can get through the difficulties caused by an across-the-board decline in auto sales." He also urged Congress to promptly provide an additional $25 billion in loans to help the companies meet health care obligations for more than 780,000 retirees and their dependents.
Mulally said Reid and Pelosi were "seeking ways to help the auto industry given these unprecedented economic challenges" and Nardelli said he was encouraged by the lawmakers' "understanding of the importance of the automotive industry to the economy."
GM has talked to Cerberus Capital Management LP, the majority owner of Chrysler LLC, about acquiring Chrysler. GM reportedly is seeking Chrysler's $11 billion in cash and federal aid to make the deal happen.
The person familiar with the discussions said the companies did not ask for Congress' help in financing a merger and the issue was not raised during the meetings. Gettelfinger has expressed concern that a GM acquisition of Chrysler would lead to massive job losses.
On the health care issue, Alan Reuther, the UAW's legislative director, said the companies are required to provide $15 billion to the fund in January 2010 and an additional $15 billion by 2012. He said $25 billion more from Congress would give the companies a better chance of immediately lining up other financing because most of the health care trust fund payments would have been covered.
President-elect Obama expressed support for an additional $25 billion in loans on the condition that the money would go toward helping the industry build fuel efficient cars. Obama has said he would meet with industry leaders and the UAW quickly to talk about helping automakers. A meeting has yet to be scheduled.