Fallout: The Financial Crisis

Pelosi to Big 3: Bring us a plan

Alisa Roth Nov 21, 2008
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Fallout: The Financial Crisis

Pelosi to Big 3: Bring us a plan

Alisa Roth Nov 21, 2008
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TEXT OF STORY

Kai Ryssdal: After a couple of grueling days on Capitol Hill, Detroit’s Big Three car makers have been sent home with some work to do. House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid promised to try to pull some help together after Thanksgiving, that is, if the automakers themselves can come up with a convincing argument for why they need the cash. We asked Marketplace’s Alisa Roth to explain what might be convincing enough.


Alisa Roth: You might call it a Dear Rick letter. As in GM’s CEO Rick Wagoner. Or Dear Bob. As in Chrysler’s Nardelli. It’s the letter Nancy Pelosi and Harry Reid sent the Detroit Three today. Because Pelosi says she needs some answers.

Mary Ann Keller: We have some problems because they keep changing their requests. We want it in writing. What is it that they want it for.

That’s what Mary Ann Keller wants to know. She’s an independent auto analyst. She says there’s some very basic information any company should offer when it asks for money. Whether it’s a loan or an investment.

Keller: What is your forecast for the economy? For vehicle sales? For your production? For your operating profits? What are you going to use this money for?

She says it’s not even about the companies building better cars. Right now, they’re in so much trouble, it’s just about how to pay their bills — to suppliers, to workers, to everybody. But in order to get the money to pay those bills, the Detroit Three may well have to convince all those people to pitch in. Edward Lapham is executive editor of Automotive News.

Edward Lapham: The UAW members have to do it. They’ll freeze pay raises inside the company probably. Some of the top guys will work for a buck a year until the loans are paid back or they’ll work for stock options or they’ll work for something else that sort of is pegged to their performance and how well they’ll do.

The Detroit Three may be listening. Today, GM announced it’s turning in two of its corporate jets. Of course, there’s always room for more cuts. For now, the company’s reportedly hanging on to the remaining three.

In New York, I’m Alisa Roth for Marketplace.

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