US lawmakers say carmakers need hand, not bailout

WASHINGTON Jan 24, John Crawley writing for Reuters reported that Michigan lawmakers, responding to proposed plant closings and up to 30,000 job cuts at Detroit-based Ford Motor Co, pressed the Bush administration on Monday for changes in trade and tax policy to help U.S. automakers better compete with overseas rivals.

"The automakers are not asking for a bailout - only for the chance to compete on a level playing field, something this administration has failed to deliver on," said Democratic Rep. John Dingell (news, bio, voting record), the senior member of the Michigan delegation.

Ford and General Motors have said they would close plants and cut tens of thousands of jobs. Competition, particularly from companies based in Asia, soaring health care and pension expenses and production costs have increased financial pressures on the unionized companies.

Ford's extensive restructuring announced on Monday proposes closing 14 plants in the United States and Canada and eliminating up to 30,000 jobs over the next six years.

"I agree with (Ford chief executive) Bill Ford when he says that we cannot cut our way to success. We have to enforce our trade laws, change the way we fund health care and protect pensions in a way that does not hurt our manufacturers," said Sen. Debbie Stabenow, a Michigan Democrat.

Bill Ford has argued that Washington needs to provide proper tax and other broad-based business incentives to help his company and other auto makers upgrade plants.

"We are a 100-year-old company with a 100-year-old infrastructure in some cases," Ford told Reuters in an interview.

Ford said it would invest $7 billion in plants and equipment in 2006 while idling facilities in St. Louis, Atlanta, Michigan and Canada. Ford also said it would build new gas-electric hybrid models.

The Bush administration does not support substantial government help for U.S. auto companies similar to the cash bailouts and other industry specific steps taken by Congress to help financially ailing U.S. airlines.

However, in 1979, under then-President Jimmy Carter, the federal government guaranteed $1.5 billion in loans to Chrysler Corp., then the No. 3. U.S. auto maker. Chrysler repaid the loans in five years. In 1998, Germany's Daimler-Benz took over Chrysler in a deal then valued at about $35 billion.

Traveling with President George W. Bush to Kansas on Monday, White House spokesman Scott McClellan said the administration is concerned about job cuts in any industry.

"What we've got to do is make sure that we focus on making sure workers have the skills they need to be able to fill the kind of jobs that are being created," McClellan said.

Treasury Secretary John Snow has said that U.S. auto companies were "a lot better than the federal government" at addressing their cost problems.

Snow went to a Ford research facility in Michigan last week to promote a consumer tax credit of up to $3,400 for hybrid purchases that took effect on January 1. On Thursday, the Energy Department will again throw its weight behind development of hydrogen fuel cell technology for use in autos.