US automakers hope Obama will bring financial aid
DETROIT — Detroit automakers and their allies in Congress said Wednesday that Barack Obama’s victory could help U.S. automakers line up federal funding needed for them to survive a terrible economic slump.
Obama made it clear during his campaign that he understood the automakers’ problems and would work to preserve the industry, U.S. Sen. Carl Levin, D-Mich., said Wednesday.
"I’m very optimistic that we’re going to have a fighter in the White House for manufacturers, and that’s what we need," Levin said.
Levin said he was told Wednesday by Jason Furman, Obama’s senior economic adviser, that government aid is atop Obama’s agenda. Levin said the Obama adviser did not commit to a specific funding path for the industry but was supportive.
Obama has said he would meet with industry leaders and the United Auto Workers immediately to talk about helping automakers, but auto industry officials said a meeting had not yet been scheduled.
Levin noted that Obama expressed support for doubling an Energy Department loan program for automakers to develop fuel-saving technology to $50 billion from $25 billion.
The senator said he and members of Michigan’s congressional delegation would pursue several funding options to help the industry, including the $700 billion Wall Street bailout or access to capital from the Federal Reserve.
Obama’s victory over Republican John McCain came just three days before General Motors Corp. and Ford Motor Co. are to release their third-quarter results, which almost certainly will show billions in losses and cash burn rates that will push the companies closer to emptying out their treasuries if auto sales don’t bounce back soon.
Further cuts by both automakers are expected on Friday, and GM’s top executives sent an e-mail to other executives Wednesday saying "important changes" will be announced just after the quarterly results are made public payday advance loan.
Spokesman Tom Wilkinson called the announcement a routine update. The e-mail did not give specifics, and Wilkinson said he could not comment on them.
Industry analysts expect GM and Ford to make further factory job cuts to match an ever-dwindling U.S. market.
Analysts say GM could close more plants, but Ford said it likely will do temporary factory shutdowns and overtime cuts at some of its car plants.
GM is talking with Chrysler majority owner Cerberus Capital Management LP about GM acquiring Chrysler. GM reportedly is after Chrysler’s roughly $11 billion cash stockpile and is seeking federal aid to make the deal happen.
Automakers and their congressional allies say some sort of government funding is necessary to bail out the troubled industry. They have been lobbying to speed up loans from the $25 billion Energy Department pot (the department late Wednesday said it planned to distribute the money by the end of the year), and for access to part of the $700 billion Wall Street bailout plan and perhaps other funding.
"What we need is to make sure that a vital industry like autos … which is such a big part of the overall economy, doesn’t lead us into a deeper and harsher downturn," Cerberus Chairman John Snow said Wednesday in an interview on CNBC. "The collapse of the auto industry at this time would be devastating for a new president."