How Big Three Automakers Can Win Over Congress
MICHELE NORRIS, Host:
From NPR News, this is All Things Considered. I'm Michele Norris.
MELISSA BLOCK, Host:
And I'm Melissa Block. The CEOs of the Big Three automakers are making a return trip to Washington. This time, they're traveling in hybrid cars, not corporate jets. That mode of travel didn't go over too well when they appeared before Congress two weeks ago. The auto execs will be asking Congress once again for emergency aid, this time as much as $34 billion. And they've come armed with new plans for how they'll try to nurse their companies back to financial health.
Ohio Democrat Sherrod Brown sits on the Senate Banking Committee, which will be hearing from the CEOs tomorrow. And Senator Brown joins us from Cleveland. Thanks for being with us.
SHERROD BROWN: Glad to be with you, Melissa. Thank you.
BLOCK: There are a lot of jobs in your state that depend on the auto industry. Do you support this bailout that's coming before you?
BROWN: Yeah. Of course I do. The auto industry is, for all its faults, and its management is not always been the best over the last two or three decades, but the auto industry is so important, not just for Ohio. But the number of jobs in this industry, and not just in auto states, but all over this country, is - the number of jobs is so significant that we need a strong, viable, prosperous domestic auto industry.
BLOCK: OK. When the executives came before your committee last month, they got a very chilly reception. What do you think they need to tell lawmakers in these hearings this week to make their case?
BROWN: I think they start with a bit of contrition, which I think that they will do. I think they learned a lesson that they should have known before when they flew in their corporate jets and would not even discuss a potential pay reduction from their multi-million dollar salaries, but they understand that.
And I think that companies, they're really proposing what the financial companies should be abiding by in terms of cuts in their salaries, in terms of executive compensation limits for other major executives, in terms of dividends, all of that. But they've also gone a good bit further in understanding that they need to cut costs in their companies.
They need a very different business plan. They need to be much more serious about building hybrids and electric vehicles and all of that. And I think they're going to accelerate their production of those vehicles and share that with us in the Banking Committee and with the Congress and with the American people.
BLOCK: How would you make the case, maybe to people outside of Ohio or maybe to Republicans on the committee who might not be convinced that this money, this $34 billion that they're requesting, is a solid investment, a good thing to do?
BROWN: First, there are no alternatives. This recession we're in would get much, much worse if we stand aside and do nothing. And I would also say that in every other country in the world, the government helps its auto industry when there are problems because they know how important it is to the nation as a whole.
We bailed out - as steelworker president Leo Gerard said, we bailed out people who take showers before work, but we refused to bail out people who take showers after work. It really is a case of - and we're requiring things of the auto industry that we didn't require of the banking and the financial services industry which we should have required. But we're going to do it right this time, and taxpayers' investments are going to be protected.
BLOCK: You think there's a double standard?
BROWN: I think there's been a double standard. I think that Secretary Paulson and the Bush administration has a - of course, have a bias towards Wall Street. That's why the secretary has refused to do this himself to help the auto industry, as he's refused to help people in their homes that are about to be foreclosed on to modify their mortgages, and we would like to see Treasury step up in both. But the focus of Treasury, the Department of Treasury, seems to be all about helping financial industries, helping Wall Street, not so much with Main Street.
BLOCK: One thing that was required, at least with the bailout of Fannie Mae and Freddie Mac, was that the chiefs of those institutions had to leave as a condition of their bailout. Do you think that the executives of the car companies should keep their jobs if they get government money?
BROWN: It remains to be seen what should happen with the executives. I think their performance tomorrow in the banking hearing will give us more indication of whether or not they, in fact, these three CEOs and their management teams are, in fact, able and ready to do what they are going to propose doing. I'm not convinced either way that the executives should stay, but I think it absolutely should be part of the discussions.
BLOCK: OK. Senator Brown, thanks very much.
BROWN: Melissa, thank you very much.
BLOCK: That's Democratic Senator Sherrod Brown of Ohio. He sits on the Senate Banking Committee that'll be hearing from chief executives of the Big Three Detroit automakers tomorrow. Transcript provided by NPR, Copyright NPR.
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