John Crawley and Kevin Drawbaugh
WASHINGTON (Reuters) - The top executives of the major U.S. auto companies pledged to refocus on higher fuel efficiency and lower production costs as they asked Congress again on Thursday for billions of dollars in emergency cash.
Reeling from a steep slump in auto sales worldwide, the chief executives of Detroit's once mighty Big Three came hat in hand to Washington with no clear prospect that they will get the $34 billion in assistance they seek.
As the Senate Banking Committee began its second hearing in as many weeks with the CEOs, there was wide agreement among lawmakers and the Bush administration that the automakers need help, but deep division about how to go about it.
"Inaction is no solution," said Banking Committee Chairman Christopher Dodd in opening remarks at the hearing.
General Motors Corp and Chrysler LLC have said they face possible failure without quick help. GM wants $4 billion and Chrysler $7 billion by year's end. GM also wants another $8 billion in early 2009 and a $6 billion line of credit if its cash position deteriorates further.
Ford Motor Co says it has sufficient funds for the moment but wants access to a $9 billion line of credit.
The executives drove to Washington, abandoning the executive jets that drew sharp criticism two weeks ago.
Shares of companies were mixed as the hearing got under way, with no resolution of the aid issue expected until next week at the earliest, when Congress reconvenes. The CEOs will appear at another hearing before a House of Representatives committee on Friday.
The impact on the economy, already a year into recession, of the possible failure of one or more of the automakers would be "severe and sweeping," said Dodd, a Connecticut Democrat.
But Alabama Sen. Richard Shelby, the top Republican on the committee, voiced doubts shared by some senators on whether taxpayer funds are well-spent helping struggling businesses.
Shelby opposed the $700-billion bailout of Wall Street and the banks and "applying the same standard, I intend to oppose bailing out the Big Three auto manufacturers," he said.
Viability plans were submitted to Congress by the automakers earlier this week on the insistence of lawmakers after the Big Three CEOs testified to the same committees two weeks ago without definite plans and went home empty-handed.
Citing his company's plan, General Motors Corp CEO Rick Wagoner pledged in prepared testimony to execute a bankruptcy-like turnaround at the world's largest automaker.
"It's a blueprint for creating a new General Motors," Wagoner said in detailing the restructuring plan and the $18 billion GM request for bailout loans.
GM has repeatedly dismissed filing for bankruptcy as an option, saying it would damage consumer confidence in its products.
Wagoner told reporters before the hearing that bankruptcy is "not our plan" and said it would be a shame for the United States to drop out of the race to change technology in the auto industry.
Wagoner was joined at the hearing by Alan Mulally of Ford Motor Co and Bob Nardelli of Chrysler, owned by Cerberus Capital Management.
Ford and Chrysler also object to bankruptcy to save their industry. But some lawmakers are exploring the possibility of conditioning federal aid on an speedy court restructuring of one or more of the Detroit manufacturers.
Shares of GM were down 2.9 percent to $4.76 in Thursday morning trading, while Ford was 2.8 percent higher to $2.93, both on the New York Stock Exchange.
(Reporting by John Crawley, Karey Wutkowski, Rachelle Younglai: Writing by Kevin Drawbaugh; Editing by Tim Dobbyn)
