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Big 3 fail to close deal on bailout

Lawmakers scrap a vote for $25 billion in aid. Auto execs take heat over private jets.

FINANCIAL CRISIS

November 20, 2008|Jim Puzzanghera and Richard Simon, Puzzanghera and Simon are writers in our Washington bureau.

WASHINGTON — Embattled U.S. automakers added a new entry to their list of troubles Wednesday: executive jet travel.

For a second straight day, the chief executives of Detroit's Big Three tried to convince a skeptical Congress that they deserved $25 billion in emergency loans. But that message was nearly drowned out by discussion of their corporate flying habits, and the Senate later scrapped plans for a vote on the loans today -- dimming hopes for a rescue plan this year.


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The executives from General Motors, Ford and Chrysler insisted that they had gotten serious about producing smaller, fuel-efficient vehicles. They also told how they trimmed corporate fat and renegotiated generous union contracts so they could better compete with foreign automakers.

But under scornful questioning by members of the House Financial Services Committee, the CEOs conceded that when they came to Washington to plead for government aid, each of them had traveled on a private plane.

"There's a delicious irony in seeing private luxury jets flying in to Washington, D.C., and people coming off of them with tin cups in their hands saying that they're going to be trimming down and streamlining their businesses," said Rep. Gary L. Ackerman (D-N.Y.) "There's a message there.

"I mean, couldn't you all have downgraded to first class or jet pooled or something to get here? It could have at least sent a message that you do get it."

The criticism from Ackerman and other lawmakers -- who travel back to their districts on commercial airlines -- highlighted why the auto executives' request for emergency money remains stuck on the runway. Many members of Congress worry that Detroit has not changed its big-spending, gas-guzzling habits, and that company executives will be back in a few months asking for billions of dollars more to stay afloat.

"My fear is you're going to take this money and continue the same stupid decisions you've made for 25 years," said Rep. Michael E. Capuano (D-Mass.), who noted that the U.S. automakers fought him and other lawmakers for years over tougher fuel-efficiency rules that finally passed in 2007.

On Wednesday night, Senate Majority Leader Harry Reid (D-Nev.) canceled plans to vote on a bailout bill. Although the loans still could be added this week to legislation to extend unemployment benefits, the move probably ends any chance for automaker aid until President-elect Barack Obama takes office in late January with larger Democratic majorities.

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