Special Car, auto, cars, vehicles

"Just like British Leyland."

Indeed. Earlier, Chairman and CEO Rick Wagoner described how GM looked at acquiring Chrysler before the credit crisis. When the credit crisis hit, GM had neither the money nor the time to pay attention to Chrysler.

I don't know what's more troubling: that GM might re-consider buying Chrysler, perhaps to refill its North American brand lineup now that it has a plan to change or get rid of Saab, Saturn and Pontiac, or that a Republican senator is willing to mandate a "shotgun wedding."

Corker's interest in a federal government-forced merger does stem from a rational concern. The good senator, much to Chrysler chairman Bob Nardelli's dismay, said he spoke with a Cerberus Capital Management board member Wednesday who told him the automaker's private equity owners has enough cash on its own to avoid a government bailout. Cerberus has no interest in giving Chrysler more money for its operations, Corker said.

Nardelli replied that private equity doesn't work that way; it consists of pension funds and other investment money, just like investors in public GM and Ford Motor Company. He also asserted that Cerberus isn't considering selling Chrysler. Corker said that Nardelli's probably the only person with knowledge of the matter who believes that.

Ford and Chrysler wouldn't have come to Capitol Hill to request bailouts, Corker said, if not for GM's desperation. And therein lies the rub. Corker, and his Republican and Democratic colleagues don't want to lend Chrysler $7 billion just to see it sold to a foreign company.

Corker also wants GM to consider restructuring its debt, a kind of pre-bankruptcy, including paying 30-cents on the dollar for its bonds, and of course, getting a better deal from the United Auto Workers. The UAW remains conservative Republicans' biggest target. Senator Richard Shelby (R-Alabama) maintained his status as biggest opponent of the loan guarantees.

Senator Christopher Dodd (D-Connecticut), the committee chairman, said that the only person at the witness table who has already contributed to a Detroit Three turnaround is UAW President Ron Gettelfinger. "They haven't said what they're going to do. They're saying what they've done. Hundreds of thousands of workers at the Big Three already have made concessions."

Good to see someone still calls them the Big Three, even if it's someone with little prior knowledge of how the auto industry works. From dealership floorplans to the vagaries of production, the Senate committee learned a lot about the industry Thursday.

Senator Sherrod Brown (D-Ohio), asked Wagoner what it takes to "ramp up" production for the 2011 Chevrolet Cruze.

"A good rule of thumb would be half a billion dollars," Wagoner responded. "If we have to develop the product as well (if it's all-new, not on an existing platform) that's three years. It's a long-cycle business."

"What happens in Lordstown (Ohio)?" Brown asked.

"We're going to proceed. We're going to build the Chevy Cruze in Lordstown," Wagoner replied.

Will GM still be around to do it? "We're not going to write a blank check, but we're going to get something done," Dodd told reporters after the hearing. "People are angry about bailouts. I suspect they'd be angrier about the failure of the auto industry with hundreds of thousands of jobs. My preference would be if the Federal Reserve and Treasury would step up with the authority we gave them."

Dodd believes the public opposition to loan guarantees for the D3 stems from the mishandled Troubled Asset Relief Program (TARP). Wagoner, Mulally and Nardelli all agreed to oversight - they said they'd prefer a "car czar" to a government board.

Dodd, who blasted Fed Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson several times Thursday for failing to show up at the hearing, said he'll continue to push to fund automaker loan guarantees from the $700-billion TARP. GM, Ford and Chrysler have requested a total of $34 billion, and it appears the "136" funds from the Energy Bill for fuel-efficiency are not available.

"The secretary of the treasury is in China right now. He needs to come home."

Perhaps Paulson is trying to find a buyer for Citicorp.

And so, after a six-hour hearing with no break, things don't look so bleak for GM, Chrysler and Ford, at least not on the Senate side. The fun continues Friday, at the House Financial Services Committee. Stay tuned.