Levin: Big 3 CEOs should resign if need be to get aid

WASHINGTON -- Michigan Sen. Carl Levin said Sunday the top executives of Detroit's Big Three automakers should consider resigning if necessary to convince Congress to quickly pass up to $25 billion in emergency loans for the struggling companies. "If it was the difference between getting this kind of support or not, obviously the management should consider resigning," Levin told NBC's "Meet the Press."

The Detroit Democrat said the government "should have more than a say" in management through an oversight board that would oversee the $25 billion in loans if they are part of the broader $700 billion Wall Street bailout, the source Democrats pushing for the aid prefer.

"I'd be happy to tell (GM CEO) Rick Wagoner that he ought to consider resigning if that is the difference between getting this kind of support and not," Levin said.

Wagoner, who has been CEO since 2000, has come under increasing pressure. Since 2004, GM has lost more than $70 billion, including more than $20 billion this year. He told Automotive News earlier this week that he has no plans to resign.

GM spokesman Greg Martin declined to comment directly on Levin's remarks, but said "the global economic crisis that has put this industry in its current precarious position far exceeds any one individual." He reiterated the company's hope that Congress would move quickly to provide to speed the company's transformation.

GM and Ford Motor Co. reported burning through a combined $14.6 billion in cash in the third quarter. GM warned it might fall below minimum funding requirements to operate by early next year as the auto industry faces sharply lower auto sales, stoking fears of bankruptcy.

"We've got at least three million jobs dependent upon this industry surviving," Levin said. "This is a Main Street problem. All of us want conditions. All of us want to support the taxpayers. All of us want to continue the restructuring."

The Senate is to take up a bill on Monday to give the automakers $25 billion. Sen. Majority Leader Harry Reid, D-Nev., and House Speaker Nancy Pelosi, D-Calif., want the emergency bridge loans to come from the $700 billion Wall Street rescue package, known as the Troubled Asset Recovery Program, or TARP.

Levin noted that President Bush endorsed $25 billion in immediate loans to automakers on Friday, but the president wants the money to come from accelerating a $25 billion loan program through the Energy Department. The administration supports dropping the strings attached that require the money to be used for future fuel efficient projects. Pelosi said Saturday that automakers must restructure further in order to receive aid.

Levin said congressional leaders and President Bush both agree quick aid is necessary. "The only difference between them is the source of it," he said.

Also on Meet the Press, Sen. Richard Shelby, R-Ala. said the Big Three are looking for a "blood transfusion" that won't solve the problem.

"They're not building the right products," Shelby said. "I don't believe they've got good management. They don't innovate. They're a dinosaur in a sense," Shelby said.

He said giving automakers $25 billion was "just postponing the inevitable" and predicted they would return for more money.

Instead they should file for bankruptcy protection, said Shelby, who is the ranking member of the Senate Banking Committee. "Get rid of the management. Get rid of the boards -- the people who brought them to where they are today. This is a dead end. It's a road to nowhere and it's a big burden on the American taxpayer," Shelby said.

Levin noted that the federal government had supported airlines after 2001 and that European automakers are asking for $56 billion in government loans from the European Union. He noted many of the problems weren't the fault of automakers -- the credit crisis, the decline in consumer confidence and the rapid fall of the economy.

The CEOs of GM, Ford Motor Co and Chrysler LLC are to testify before the Banking Committee on Tuesday, followed by an appearance before the House Financial Services Committee on Wednesday.

President-elect Barack Obama, in an interview to air Sunday on CBS' "60 Minutes," said he backed aid -- but with conditions that still haven't been finalized.

"For the auto industry to completely collapse would be a disaster in this kind of environment," Obama said. "So it's my belief that we need to provide assistance to the auto industry. But I think that it can't be a blank check," Obama said.

He urged more talks to find a plan that works.

"So my hope is that over the course of the next week, between the White House and Congress, the discussions are shaped around providing assistance but making sure that that assistance is conditioned on labor, management, suppliers, lenders, all of the stakeholders coming together with a plan -- what does a sustainable U.S. auto industry look like?" Obama said. "So that we are creating a bridge loan to somewhere as opposed to a bridge loan to nowhere. And that's I think what you haven't yet seen."

David Shepardson / Detroit News Washington Bureau
You can reach David Shepardson at (202) 662 - 8735 or dshepardson@detnews.com.
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Why does the Senator from Michigan want the CEOs of GM, Ford and Chrysler to resign before their companies get money from the government?

Do you think the companies should file for bankruptcy instead of receiving bailout money?

What do you think a smaller company (one that didn't have federal funds bailout as an option) would do if in this position?

Can you think of other U.S. industries that you'd rather see receive this money?
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