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DETROIT — A day before the three Detroit automakers return to Washington to again ask for a federal bailout, the United Automobile Workers union took its turn in promising cuts and concessions as part of a concerted effort to win the support of lawmakers.42
The U.A.W. president, Ron Gettelfinger, said the union would suspend its jobs bank, which requires carmakers to keep paying laid-off employees, and would consider changes to its labor contracts.29 The union has also agreed, Mr. Gettelfinger said, to delay the payments that the automakers must make to a new retiree health care fund called a Voluntary Employee Beneficiary Association, or VEBA.32
The announcements came as the Detroit chief executives prepared to make a second plea for federal assistance at a House hearing on Thursday.23 The Senate holds a hearing on Friday.7 On Tuesday, the car companies submitted plans detailing why they needed government-backed loans and how they would use the money. 20
Together, the three Detroit companies are asking for $34 billion in aid, a significant increase from the $25 billion request the automakers made to Congress two weeks ago.28 The increase is based, Ford’s chief executive, Alan R. Mulally said, on the fact that Democratic leaders told the companies to base their revised loan requests on economic conditions.29
Those conditions are getting steadily worse.6 On Tuesday, the industry reported that overall sales sank nearly 37 percent in November from the same period a year earlier.21
“Part of the reason the money went up is that we gave them a range of what might happen with the economy and also with the industry,” Mr. Mulally said.30 “It shows that we’re not focused on just one base line plan, but also what if it did get worse.”20
G.M. said it needed $4 billion this month merely to survive into 2009 and another $14 billion after that.19 The company plan calls for more plant closures and job cuts, along with the sale or elimination of four brands.20 Chrysler, which is requesting $7 billion, also said it could collapse soon without aid.14 Ford asked for a $9 billion line of credit but said it did not expect to access that money unless the economy worsens or a rivals fails.27
At a news conference, Mr. Gettelfinger said that the U.A.W. would be open to modifying the four-year contracts that it signed in 2007 but not to completely restarting negotiations.29 Changes could include cuts to wages, health care or other benefits, though he did not give details, and would require approval from union members, but the jobs bank suspension does not.31
About 3,600 workers currently receive benefits under the jobs bank program, which the automakers created in the 1980s to win union approval for productivity improvements.25 The automakers have played down the need to eliminate it, but industry critics often cite it as a symbol of inefficiency for Detroit.23
“The jobs bank has become a sound bite that people use to beat us up,” Mr. Gettelfinger said, who will join the auto executives at Congressional hearings starting Thursday.29 “It’s become a lightning rod that takes away the focus from what the real issue is, and the real issue is the backbone of America.” 25
Mr. Mulally warned in an interview that a failure of G.M. or Chrysler could also drag down Ford and countless dealers and suppliers.23 But he said that he was under no illusion that Ford could survive a bankruptcy filing by either of its cross-town Detroit rivals. 23
“If one of the major automobile companies should seek bankruptcy protection,” he said, “it could easily drag the entire industry into bankruptcy, which we think would be terrible for the U.S. economy as well as for the industry.”38
Mr. Mulally said Ford needed a line of credit in case the automotive market — already the worst in 15 years — continues to deteriorate.23
“If despite everything that we’re doing as a country to arrest this recession, that things still get worse, we at Ford might need a bridge loan,” he said.28
Congressional leaders are reviewing the plans ahead of hearings on Thursday and Friday. 13
“I think it is plain that Chrysler and General Motors cannot survive without government help,” Senator Arlen Specter of Pennsylvania, the ranking Republican on the Judiciary Committee, said in an interview on Fox.33 “The need now is to take a detailed look at their plan to see if they have a realistic opportunity to survive.”22
Democratic leaders, who have been supportive of a bailout from the start, signaled their support of the new plans after they were filed, though many other lawmakers were waiting until the hearings before making a decision.36
A big question before Congress is where the money will come from to finance the loans.16
The Bush administration has declined to provide financing from the $700-billion financial rescue plan set up to help banks and other Wall Street institutions. 24 The administration has suggested that aid for the automakers come from a $25 billion loan program for fuel-efficient vehicles already approved by Congress.23
However, Democratic lawmakers have balked at using that loan program for anything other than to encourage the development of cleaner cars and trucks.23
Mr. Mulally said that the automakers were not taking sides on where the money originates, only that it is approved before G.M. or Chrysler run out of operating cash.29
President-elect Barack Obama praised the three companies for producing “a more serious set of plans” to save the industry, but withheld judgment about how he thinks the federal government should help at this point.34
At a news conference announcing his commerce secretary, Mr. Obama said he had not seen the plans but pronounced himself pleased that the manufacturers were being more responsive to the concerns that he and lawmakers have expressed. 37
“When the Big Three automakers came before them a couple of weeks ago,” he said, referring to Congressional testimony by auto executives, “they were not offering a clear plan for viability over the long term. 35 And I think Congress was right to say that the taxpayers expect and deserve better than that before they are stepping up to the plate for any kind of bailout.”30
Now, he said, the latest plans indicate a seriousness by the auto executives. 13
“But we should also make sure,” he said, “that any government assistance that’s provided is designed for a — is based on realistic assessments of what the auto market is going to be and a realistic plan for how we’re going to make these companies viable over the long term.”49
Mr. Obama said he still wanted to listen to more discussion before deciding what he thinks the government should do next. 21“It’s premature to get into that issue,” he said.9
At the U.A.W. meeting in Detroit, union officials described their members as extremely anxious about the prospect of more concessions but at the same time afraid of what would happen if the union did not aid the automakers.38
“We’ve helped them before, but it seems like they always come back to us,” said Shane Colvard, chairman of Local 2164 in Bowling Green, Ky., where G.M. builds the Chevrolet Corvette sports car.33
But a G.M. retiree, Frank Hammer, said looking to the union for givebacks does not resolve the automakers’ problems and compounds the bad economy.24
“More concessions mean more foreclosures,” said Mr. Hammer, 65, who worked at G.M.’s transmission plant in Warren, Mich. “Concessions are not a solution.”23
“We’re all getting smeared with this brush that we’re somehow greedy,” Mr. Hammer said.14 But if pay and benefits are cut, he told a group of reporters gathered outside the meeting, “what autoworker is going to be able to buy their product?”28



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