Government Closes In On Deal for Automakers

Some Call for GM's CEO to Resign

Some members of Congress have also recently suggested that the auto companies need a change in leadership and proposed that that stipulation be included in the plan. Connecticut's Sen. Christopher Dodd has suggested that General Motors CEO Rick Wagoner be replaced. This weekend, President-elect Barack Obama, while expressing support for congressional efforts to help the auto industry, also referred to decisions that should have been made decades ago by an industry with a "head-in-the-sand" approach.

Today Perino declined to comment when asked if the White House thought the Big Three needed new leaders.

In an ad in Automotive News, GM made its case to American taxpayers. Wagoner told lawmakers last week that GM, without an infusion of $4 billion in taxpayer loans before the end of the year, would go bankrupt and have to be liquidated.

"We know some Americans have questioned why the federal government should assist the auto industry, specifically when so many other sectors of the economy appear to be at serious risk too," the company stated. "The answer is because we have already lost a number of industries that spin raw materials into finished products that can be purchased by the citizens of this nation and, just as importantly, those of other nations."

"A healthy manufacturing base generating exports is critical to the economy and national security of the United States. The auto industry is the backbone of this country's manufacturing base. This is why we need to borrow money from U.S. taxpayers," Wagoner argued in the ad.

New job loss numbers released last Friday from the Labor Department added urgency to the auto industry's effort. The numbers revealed 533,000 job losses in November.

November was the worst monthly report for job losses since December 1974 and the sixth worst month since 1929, when record keeping first started.

"It now goes to the actual stability of the financial sector itself," Sen. Carl Levin, D-Mich., said Thursday after a Senate hearing on the topic. "The banks and financial sector would be threatened if the Big Three go under."

"Context is especially important this morning," Frank said Friday. "A failure to some extent of three of our major domestic manufacturing entities would be a very serious problem in any case. In the midst of the worst economic situation since the Great Depression, it would be an unmitigated disaster."

As automotive industry leaders made their case to both sides of Congress last week, James Fleming, president of the Connecticut Automotive Retailers Association, told senators that failures at the Big Three automakers would be devastating for small businesses because it's 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.

On Monday, Chrysler CEO Bob Nardelli also posted a message to employees.

"Assuming the receipt of the bridge loan, concessions from all Chrysler's major constituencies and our continued restructuring and transformation, Chrysler would manage through the current economic downturn and generate adequate cash to begin repayment of the loan in 2012," he wrote.

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