Word: auto
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Faced with the choice of bailing out the ailing auto industry or letting it fail, Congress picked a brave third option: procrastination...
...weeks now, the auto manufacturers, led by GM, have been warning that they are on the brink of bankruptcy. And they insist that in the current climate, without billions of dollars from Washington, bankruptcy would mean total liquidation, not the restructuring that many experts argue is the only real way to fix the industry. Given the complex, interdependent system of auto-parts suppliers, analysts warn that the loss of one of the Big Three could take down the entire sector - and with it some 2.5 million U.S. jobs - in a cascade effect...
...lawmakers, showing signs of bailout fatigue after the $700 billion financial-crisis package passed in September, have been left largely unimpressed by Detroit's cries for help. All week long, Senators and Representatives from both parties have lamented the decades of bad management that have put the auto industry in its current predicament: investing in SUVs when the rest of the world, eyeing the future oil crunch, was betting on smaller, more fuel-efficient cars; spending millions lobbying Congress to avoid regulation that would force tougher environmental standards; and giving its union unsustainably generous deals on salary and benefits that...
...Certainly Michigan Senators Carl Levin and Debbie Stabenow - along with three of their colleagues from other states whose economies depend on the auto industry, including Republicans Kit Bond of Missouri and George Voinovich of Ohio - felt their plan was sufficient. At a much subdued press conference held right after Reid and Pelosi's wrapped up, they unveiled their compromise, which would pull the $25 billion from a fund approved earlier this year to help the auto industry develop more fuel-efficient cars; that notion had actually been pushed by Republicans earlier in the week, but until Thursday, Democrats had contended...
...After a week in which they were berated for their incompetence, the automakers reacted to the proposal with cautious optimism. "We appreciate the Congress's recognition of the auto industry's vital contribution to the nation's economic strength and national security. We intend to deliver a plan to Congress that shows them a viable General Motors," said GM spokesman Greg Martin. "We agree completely that there must be accountability to U.S. taxpayers for government support that enables automakers to continue their restructuring and to ensure a stronger, more competitive auto industry." For its part, Ford, which is the strongest...