Now it's up to Congress. The CEOs of the Detroit three automakers appeared before the House Financial Services committee Friday, making their fourth plea for a bailout in less than three weeks. The appearances were likely their last in 2008. While no consensus on the source or amount of funding emerged, indications were that Congress will come up with some form of funding. "There's a lot more agreement that we should do something," said committee chairman Barney Frank, D-Mass, as the hearing concluded. "It's fair to say that the jobs report today, this disastrous jobs report, has heightened the interest in doing something," Frank said. "If we are lucky, we will come out with a bill next week that nobody likes, because any bill that everybody likes couldn't pass. There is an understanding that we have to work together (and) there are a lot of ways to do this." Pressure is mounting. General Motors ( GM) and Chrysler say they are running out of money, as the financial crisis and lack of credit have spooked potential car buyers. Chrysler wants $4 billion this month, while GM wants $4 billion this month and $10 billion by the end of the first quarter. Ford ( F) says it does not have an immediate need for cash, although it is seeking access to a $9 billion line of credit. The total request is $34 billion. "I don't want to open the paper to see what the markets look like on Monday morning because Congress has gone home" with offering anything, said Columbia University professor Jeffrey Sachs, who testified at the hearing Friday. "It's really important to get this thing done."
Rep. Paul Kanjorski, D-Pa., said Congress has little appetite to provide $34 billion, and pushed to provide enough funding to keep GM and Chrysler operating March 31, enough time to work out viable business plans with stakeholders including the United Auto Workers, suppliers and creditors. He suggested a course that would force restructuring outside of bankruptcy. "They have to restructure," Kanjorski said, urging: "Impose a super master on the board (who) can impose a settlement. If creditors aren't willing to take a haircut, impose a haircut." He added: "I can't understand why we're arguing what pot this is coming out of," but that is the primary issue separating Democrats and Republicans. The Bush Administration want to tap $25 billion set aside earlier this year by the Energy Department to help automakers retool plants to build more fuel-efficient vehicles. Other potential sources include the Troubled Asset Relief Program and a new Congressional allocation. On Friday, Senate Majority Leader Mitch McConnell, R.-Ky., told the Louisville Courier-Journal that he has "not decided yet" what course he prefers. "However the short-term funding comes is up to the Congress," said GM CEO Rick Wagoner. But he said the company is seeking about $8 billion from the Energy Department, and "we would hope it would be replenished" if it became a source of immediate financing. Wagoner also responded once again to the suggestion Chapter 11 bankruptcy would provide a suitable forum to reorganize. He noted that GM's pension plans are funded, and the UAW has agreed to stretch out payments for retiree health benefits. "Bankruptcy doesn't help a lot on these issues, and it will cream revenues," he said. As the hearing concluded, Frank offered an observation. "One of the things we have learned is averting disaster is no basis for a political campaign," he said. "If you do something good, people are happy.
But avoiding something bad, people are not happy."