| November 6, 2008 Auto execs seek to rev up revenue
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(NECN: Peter Howe) - U.S. automakers have been struggling to survive a dramatic downturn. Today, they turned to Capitol Hill for help. Leaders of Detroit's auto industry sat down with House Speaker Nancy Pelosi.
Tim Lerchenfeldt has been in the car business since the 70s, selling at different times Buicks, Pontiacs, Cadillacs and Hummers. With all three big U.S. carmakers in dire straits, on the brink of bankruptcy, even Chrysler considering a takeover by GM, Lerchenfeldt says automakers deserve government help, at least as much as Wall Street.
House Speaker Pelosi is meeting with the big three CEOs and the head of the United Autoworkers Union to discuss terms.
The U.S. Energy Dept. is making $25 billion available to car makers to retool factories to produce fewer big cars and more small fuel efficient cars. There's talk of potentially doubling that to $50 billion, or giving car makers some of the $700 billion bailout.
Car makers also need relief from the credit crunch. Lerchenfeldt hopes help comes soon, but he's been around long enough to be confident Detroit will bounce back.
While a lot of the things the government has been doing to bail out banks and Wall Street are unprecedented, there is one good precedent for helping the car makers: The 1980 government Chrysler loan guarantee, tied to wage concessions by UAW car workers. Expressed in today's dollars, the government lent Chrysler $4.5 billion, got it all back, and turned about
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