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Congress 'bails' on helping the auto industry. Now what?

David Lightman | McClatchy Newspapers • Published December 03, 2008

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WASHINGTON — If there's a single moment that explains why Congress refused Thursday to give the ailing American auto industry immediate help, it came when Rep. Brad Sherman asked company executives to raise their hands if they'd flown to the nation's capital on commercial airlines.

No hands went up.

Then the California Democrat asked the heads of General Motors, Ford Motor Co. and Chrysler LLC, who were testifying before the House Financial Services Committee on Wednesday, whether they were planning to sell their corporate jets and fly home commercial.

Again, no hands went up.

Industry spokesmen explained later that they have travel policies to follow and safety considerations, but the public relations damage had been done.

"I know it wasn't planned, but these guys flying in their big corporate jets doesn't send a good message to people in Searchlight, Nevada, or Las Vegas or Reno or any place in this country," Senate Majority Leader Harry Reid, D-Nev., said Thursday.

He and House Speaker Nancy Pelosi, D-Calif., agreed to delay until next month consideration of aid to Detroit's automakers after finding that they lacked the votes for even a last-minute compromise on a $25 billion loan.

"Until we can see a plan where the auto industry is held accountable and a plan for viability on how they go into the future . . . until they show us the plan, we cannot show them the money," Pelosi said.

Their decision, reached at a hastily called private early afternoon meeting, came after nearly a week of tension among congressional lawmakers, the White House and the industry.

They all agreed that the carmakers need help, and the executives warned Congress that their industry could collapse within weeks without it. Economists disagree about whether that necessarily would devastate the Midwest and U.S. economies or whether conventional bankruptcy might be a better solution, but the chance of devastation is real.

However, several developments converged to make it impossible for lawmakers to cut a $25 billion check, factors that are still likely to be present next month.