Auto CEOs Return to Capitol Hill

Chrysler CEO Bob Nardelli, who said the company is requesting a $7 billion loan, told the Senators that bankruptcy for the auto makers would be more expensive than the now-$34 billion in loans and lines of credit the car makers are seeking.

Ford CEO Alan Mulally, Chrysler CEO Robert Nardelli and General Motors CEO Richard Wagoner arrive on...

Ford CEO Alan Mulally, Chrysler CEO Robert Nardelli and General Motors CEO Richard Wagoner arrive on Capitol Hill, Dec. 4, 2008, to testify before the U.S. Senate Banking Committee hearing on the financial assistance package for the big Detroit automakers.

(Reuters/AP Photo)

"I recognize that this is a significant amount of public money. However, we believe this is the least costly alternative considering the depth of the economic crisis and the options we face," he said.

But an economist, Mark Zandi of Moody's Economy.com, told the Senate Banking Committee that while bankruptcy will be more expensive than bailing out the car companies, he does not believe $34 billion will be the final price tag.

"$34 billion and a plan may not be enough for them to become viable again and Congress should prepare for this eventuality," Zandi said, predicting that by next fall auto makers will be back asking for more loans. Zandi predicted a final tab of between $75 billion and $125 billion.

Offering the perspective of car dealers, James Fleming, president of the Connecticut Automotive Retailers Association, said failures at the big three automakers would be devastating for small businesses because it's exceedingly difficult for a dealer to get people financed for cars when banks are hesitant to give them money.

"To our people, to these small business people, it is a tsunami, it is not a ripple," Fleming said.

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"What you're voting for here, what you're supporting here is keeping people employed in those small businesses in your district," he said.

CEOs Road Trip To Washington

After an unsuccessful trip to Washington a few weeks ago to plead their case, the CEOs of Ford, General Motors and Chrysler hoped this time would be different. For starters they came to Washington in hybrid and prototype electric vehicles instead of private jets as a sign of a commitment to fuel-efficient cars and frugal travel.

Lawmakers from the Rust Belt and auto company leaders were outside the hearing building this morning to display some of the fuel-efficient technology they used for the road trip to Washington.

GM CEO Rick Wagoner, who arrived in a prototype for the forthcoming Chevy Volt, admitted that GM needs an infusion of cash before the end of the month to stay afloat.

"We're sorry to be asking for this support," Wagoner said. "We wish the market conditions were better. They're not. So this is what we need to do."

United Auto Workers president Ron Gettelfinger also arrived in town this morning from Detroit -- on a commercial flight.

"We are pleased to be here and to have the opportunity to testify again before Congress and we are going to make a pitch again for the emergency low-interest bridge loan to get the industry through a downturn that is not of their making," the union president told ABC News this morning at Reagan National Airport.

"We are going to talk about bankruptcy. We are going to present testimony that shows that it is a failed concept and will not work in this case."