Roundtable on the Auto Bailout

Roundtable on the Auto Bailout

FOX News Special Report With Brit Hume - December 4, 2008


RICK WAGONER, GENERAL MOTORS CEO: We're here today because we made mistakes which we're learning from, because some forces beyond our control have pushed us to the brink, and most importantly because saving General Motors and all this company represents is a job worth doing.


WALLACE: That was General Motors CEO Rick Wagoner asking Congress for billion in a government bailout to keep GM going into next year.

It's time to hear what our panel thinks, FOX News contributors Fred Barnes of "The Weekly Standard," Mara Liasson of National Public Radio, and Mort Kondracke of "Roll Call."

Well, they say, in the old clich, is you never get a second chance to make a first impression, but Fred, the big three auto executives did get a second chance today. How did they do?

FRED BARNES, EXECUTIVE EDITOR, "THE WEEKLY STANDARD": Well, they made a better impression than they did before.

But I don't think they were the key players here. The key players were this economist from Moody's, Mark Zandi, who the Senate Banking Committee paid a lot of attention to. And, of course, he said, look, they're going to need more money than this $34 billion. That may take them through some months but you-

WALLACE: He talked about-

BARNES: Yes, $125 billion. But he said this, he said, look, give them some money now and get them through, say, the end of March. But you apply benchmarks and enforce benchmarks. And if they don't meet them, you don't give them any more money.

The other person, by far the senator who was the best, no question about it, was Bob Corker of Tennessee, who knew more than anybody else there. And he had a solution, and it made sense.

He said let's do that, let's have some benchmarks. The benchmarks--one thing, you have to clear your balance sheets, so you get rid at 30 cents on the dollar, this $28 billion in bonds, which is better for the bond holders than they get right now, and you have to get the UAW to accept its stock half of the money that owed their pension fund, which would be about $10.5 billion.

And, thirdly, and here is the hard one, to get the UAW to accept the same wages and benefits that are paid to workers in auto plants in those transplants, you know, the Japanese and German companies that build cars in the south.

It will be hard to get the UAW to do that, but if you met those, by the end of March, you could have viable companies that could probably attract investment on their own.

WALLACE: Mara, there were even more ideas throughout. One senator, I think it was Bennett of Utah, said "I think GM and Chrysler should merge," because obviously Chrysler is the company that seems in the most danger. Others talked about a pre-packaged bailout.

Did you get the sense that some of those alternative ideas of Corker's got more weight, one, from the members of Congress who are going to have to approve the money, and, two, from the players in Detroit?

MARA LIASSON, NATIONAL POLITICAL CORRESPONDENT, NATIONAL PUBLIC RADIO: I think that something is going to -- there is going to be a workout. You might call it a bankruptcy, although it might not be technically a bankruptcy. These companies will not look the same when they come out of this.

I do think the Obama administration is inclined to do something for them and to make sure the big three don't disappear. But there may not be three of them when they're done. and they will look a lot different and they will be smaller and they will have to have lower labor costs.

And the UAW will have to make concessions, which they say they're willing to do.


MORT KONDRAKE, EXECUTIVE EDITOR, "ROLL CALL": GM may not last until the Obama administration comes in. They are running out of money right now.

So the best idea I have heard, and I agree with Fred, was the Corker idea, and Fred explained it very well.

WALLACE: Are they on the hook in the Corker idea, and they on the hook just for the $34 billion, or are they saying, yes, we are going to pony up $75 billion to $100 billion?

KONDRAKE: This was designed specifically for GM, and it would get the money. And if it did not do all the reforms that Fred enumerated, that they would have to go into bankruptcy by March 31st, that there would be a deadline on this.

And, as you said, the deal that corporate was laying out is better for both the unions and the creditors than bankruptcy would be. And clearly, if GM went out of business entirely, then everybody would lose everything, including the workers their jobs.

WALLACE: Fred, it sounds as if the ideas, the business plans that Detroit came here with such fanfare were just thrown out in the sense that Congress will come out with its own set of conditions, its own structuring for the money that it gives them.

BARNES: That was a problem. And what members of Congress want is something that can be enforced. And that's why they follow the Corker plan, say, you would pass legislation that says you have to meet these benchmarks or you don't get any more money.

And he did ask Rick Wagoner of GM if he would accept money now and accept those benchmarks to get more money, and Wagoner said yes.

LIASSON: They're willing to take oversight, willing to take an auto czar.

WALLACE: Everything except step down from their jobs, thought.

LIASSON: But, look, these auto companies are no longer in charge of their own fate. Congress is and the taxpayers are.

WALLACE: Let me just ask you real quickly--we have about 30 seconds left in this segment. I'll start with Fred and move down. Is Congress going to do something before they go home, or is this going to have to wait for the new Congress and the new president?

BARNES: That's a good question. I think they will give them some money now, but impose benchmarks for more.


LIASSON: I think the big restructuring will come in the next congress.

WALLACE: But they are going to give them some money now?

LIASSON: They will give them something now, yes.

KONDRAKE: They have got to give them some money now, because otherwise GM will go out of business. And if GM goes out of business, you lose a million workers or so.

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