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Big 3 plead for aid, get no traction

Lawmakers cite the environment, unions and equity for workers at non-U.S. automobile plants in their states.

November 19, 2008|Jim Puzzanghera and Richard Simon | Puzzanghera and Simon are writers in our Washington bureau.

Troy A. Clarke, president of GM's North American operations, said in an interview Tuesday that many people didn't realize how much the industry had changed.

"People are carrying around with them an image of our industry from the 1970s," he said.

As evidence of the industry's new face, Clarke pointed to the landmark union contract in 2007 that would significantly reduce labor and retiree costs, as well as the forthcoming Chevrolet Volt, an electric car with a backup gasoline-powered generator. The company says the Volt should travel 40 miles on a single charge.

"This is a dynamic industry that is well on its way to becoming a very lean competitor that's going to compete on the basis of advanced technology," Clarke said.

GM chief Wagoner told the Senate panel that products weren't the company's problem.

"What exposes us to failure now is not our product lineup, is not our business plan, is not our employees and their willingness to work hard, is not our long-term strategy," Wagoner said. "What exposes us to failure now is the global financial crisis, which has severely restricted credit availability and reduced industry sales to the lowest per-capita level since World War II."

He added: "Our industry, which represents America's real economy, Main Street, needs a bridge to span the financial chasm that is open before us."

As the auto industry executives were testifying, auto dealers from around the country were flying into Washington to lobby for the $25-billion package.

"We're trying to put a Main Street face on this issue," said Bailey Wood of the National Automobile Dealers Assn., which expects 700 auto dealers to go out of business this year. Many customers won't buy vehicles from a dealer if the manufacturer is in bankruptcy, the group has warned.

But lawmakers such as Sen. Roger Wicker (R-Miss.), whose state is home to Nissan and Toyota plants, appeared yet to be convinced.

"To provide a $25-billion bailout for some companies isn't fair to taxpayers or the American businesses that have made smart decisions," he said, "nor is it good government policy."


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