Business

Big 3 justify loan request

WASHINGTON — 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 with 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 although 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."

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 he 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 one Friday before the House Financial Services Committee, crucial in gauging support for any help. Several thorny issues still need to be resolved, including oversight.

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.

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.

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.

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