After a press conference on General Motors Corp.'s plan to cut 47,000 jobs worldwide this year, CEO Rick Wagoner began a new and urgent sales pitch to lawmakers. (David Guralnick / The Detroit News)
WASHINGTON -- General Motors Corp. and Chrysler LLC quickly began the task of selling their revised restructuring plans to the White House, Congress and a bailout-weary public after asking for up to $21.6 billion in additional government aid.
GM Chairman and CEO Rick Wagoner launched a new and urgent sales pitch Tuesday night, less than an hour after wrapping up a press conference on the automaker's plan to cut 47,000 jobs worldwide this year and seek as much as $16.6 billion more in federal help to survive the worst downturn in the global auto market in decades.
Wagoner briefed Michigan members of Congress and staffers for 45 minutes by phone late Tuesday and followed that with a round of calls Wednesday morning to top congressional leaders and other key members of Congress. He also spoke to Michigan Gov. Jennifer Granholm.
Wagoner's calls included a half-hour session with Sen. Bob Corker, R-Tenn., who unsuccessfully sought to negotiate a deal in December to help the automakers restructure and has emerged as a GOP point person on autos.
In an interview, Corker said he urged Wagoner to again hold "exploratory" merger discussions with Chrysler.
The automakers held talks last fall but abandoned them when GM wanted to focus on its growing cash crisis. Chrysler, in submitting its revised recovery plan to the U.S. Treasury Department Tuesday, said a GM-Chrysler merger remains the "best option" but GM "took it off the table." Chrysler instead wants a tie-up with Italian automaker Fiat SpA.
"This is a critical point for the auto industry and for the nation," Corker said.
He praised GM's "transparency and candor" in its plan but said he wasn't ready to endorse or oppose the company's request for more money.
He urged President Barack Obama to enforce the March 31 deadline for GM and Chrysler to show significant progress toward becoming viable companies.
Chrysler has also been working to brief policymakers. The company held a conference call for Michigan members of Congress and their staffs Tuesday afternoon, led by top lobbyist John Bozzella, and had to add more phone lines to accommodate the 450 staffers and lawmakers who called in. Chrysler has been briefing the White House, the Treasury Department and congressional staffs, said spokesman Stuart Schorr. "We are committed to being transparent and having dialogue with all interested parties," he said.
Last month, Stephen Feinberg, founder and head of Cerberus Capital Management LP, went to Capitol Hill to meet with members of Congress, but it's not clear what the meetings were about. Cerberus owns 80.1 percent of Chrysler.
GM said it was working to explain its plan, and held an hour-long conference call Wednesday for financial analysts.
"We've said that we would be transparent and accountable as we implement our plan," spokesman Greg Martin said. "That's why we're doing our best to reach out to Congress to explain our plan and to be responsive to their questions."
Michigan congressional aides on the GM call said there had initially been "sticker shock" to the size of the request for additional aid, but understood it once the automaker explained the details of plan.
But some Michigan members of Congress noted that the people who most need convincing are the members of the recently-formed Presidential Task Force on Autos -- an interagency task force of 10 cabinet and White House agencies that will review the automakers' recovery plans and make recommendations to the president.
The panel will be advised by a special assistant to the United Steeworkers, Ron Bloom, a former investment banker who has worked on many complex union-management negotiations.
GM and Chrysler must show they are viable by March 31 or Treasury Secretary Tim Geithner, co-chair of the task force, could call back the loans, forcing the companies into bankruptcy. GM says it needs $2 billion more in March and Chrysler says it needs $5 billion before March 31 to avoid bankruptcy.
"The reality is its in the hands of the task force," said Rep. Thaddeus McCotter, R-Livonia., reiterating that he wants to see someone with automotive or manufacturing experience on the panel.
Sen. Carl Levin, D-Detroit, praised the automakers' plans, but said the public will need convincing to understand why more money is needed.
"They're realistic," Levin said of the plans in an interview Wednesday. "They show some real cooperation between the companies" and the United Auto Workers. He said the request for additional money "is not surprising" given the weakness in the auto market and economy.
Levin was critical of bondholders, whom he predicted would "play a game of chicken right up to the (March 31 deadline)."
Under the terms of the loans they've already received, GM and Chrysler must win concessions from the UAW and bondholders to help them cut costs.
On Tuesday, Levin spoke with Obama auto co-taskforce chairman Larry Summers, the White House National Economic Council, and had a "blunt" talk on autos. He told Summers he would like to see someone with manufacturing experience on the panel and invited him to come to Michigan to see the auto industry first-hand.
Summers told PBS' "NewsHour" on Wednesday that the administration will carefully study the plans. "The task force will be rolling up its sleeves and getting to work looking at all of this," he said, declining to rule out bankruptcy as an alternative. "The auto industry, given what has happened, is going to require some quite fundamental restructuring. And there's going to be a need for all the major stakeholders to take a role in that fundamental restructuring."
So far congressional leaders haven't weighed in on the plan.
Sen. Majority Leader Harry Reid, D-Nev., issued a noncommittal statement Wednesday that echoed a statement from House Speaker Nancy Pelosi.
"Now that the companies have submitted those lengthy and detailed restructuring plans, we must give the Obama administration room to evaluate them and determine whether it is appropriate to provide additional assistance," Reid said.
Sen. Debbie Stabenow, D-Lansing, said the requests were "sobering" but in GM's case consistent with its original request for $18 billion in aid in December. Chrysler's request is "a little more difficult" because it is asking for $2 billion more.
But both companies have sent thoughtful comprehensive plans to the Treasury Department, she said. "They will need some time to have their team digest it." But the fate of GM and Chrysler will ultimately rest in the hands of Obama, who will have to sign off on granting them more money. He told The Detroit News and other newspapers last week that his message to automakers was "get me a plan that works." He also wanted to see realistic assumptions in the plan.