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The Honolulu Advertiser
Posted on: Sunday, November 30, 2008

Automakers ready to make new case for loan

By Kendra Marr
Washington Post

Hawaii news photo - The Honolulu Advertiser

Auto industry executives, from left, General Motors Chief Executive Officer Richard Wagoner; Chrysler Chief Executive Officer Robert Nardelli; and Ford Chief Executive Officer Alan Mulally.

EVAN VUCCI | Associated Press

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WASHINGTON — When Detroit's Big Three automakers return to Capitol Hill next week to re-plead their case for a $25 billion emergency loan, they may be flanked by a posse of supporters.

A plan is taking shape for auto suppliers, dealers and factory workers to caravan from Detroit to Washington in American-made, fuel-efficient vehicles. The National Automobile Dealers Association is considering flying in dealers from around the country to deliver the "message of Main Street," underscoring the urgency of the industry's crisis.

Discussions on the lobbying efforts began last week immediately after the top executives from Ford, General Motors and Chrysler appeared before a skeptical Congress, setting off a wave of anger and frustration within the auto industry.

"It was clear from the comments from the members of Congress that what they knew about Detroit pretty much stopped at 1999," said Peter M. De Lorenzo, a former automotive advertising executive and editor of the www.Autoextremist.com blog, a must-read for industry insiders. "They regurgitated all the same stuff: Detroit doesn't make vehicles anyone wants. Detroit doesn't have high-tech expertise. Detroit doesn't make fuel-efficient cars."

The CEOs also were chastised by members of Congress for flying to Washington in private jets while their companies were languishing.

Chrysler says Chief Executive Robert Nardelli will not fly on a corporate jet when he returns to Washington this week. Nardelli joins General Motors Corp. CEO Rick Wagoner in rejecting corporate aircraft for the return to Capitol Hill.

Ford Motor Co. still hasn't said if CEO Alan Mulally will use a company jet to get to Washington.

The CEOs had a disastrous visit to Congress two weeks ago, with members chastising them for high labor costs and huge losses in addition to the use of company planes.

Detroit-area car dealer Carl Galeana said he was infuriated when a CNBC reporter covering the hearing asked viewers, "Who buys these cars anyway?" Last year, about half of the vehicles sold in the United States were made by the Big Three.

Efforts to mobilize a caravan or other demonstration are still in the formative stages and may not come to pass. The United Auto Workers labor union, for instance, has not formally decided if it will participate.

But the talk comes as U.S. automakers race to craft revitalization plans that they hope will prove to Congress that they are worthy of a $25 billion emergency loan. House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., expect the plans by Dec. 2, and Congress might vote on the loan package Dec. 8.

GM plans on submitting a 10- to 12-page public summary and a more detailed report that would include proprietary information for lawmakers' eyes only, said people familiar with the matter who spoke on condition of anonymity because the documents are still being drafted.

A few lawmakers have been consulting with former Michigan Gov. James Blanchard, who helped design Chrysler's 1979 bailout. Blanchard warned of waiting too long to act.

In 1979, "as people kept talking about bankruptcy, the sales dried up to nothing," he said. "Washington almost talked Chrysler to death."

In a letter, Sen. Charles E. Schumer, D-N.Y., called on the Federal Reserve and Treasury this week to assist the companies' financing arms to boost auto sales.

President-elect Barack Obama this week reiterated that Washington should not write a "blank check" to the auto industry.

"Taxpayers can't be expected to pony up more money for an auto industry that has been resistant to change," he said at a news conference.