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Hagel plans to support auto loans

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By DON WALTON / Lincoln Journal Star

Thursday, Dec 11, 2008 - 06:45:27 pm CST

Departing from most of his Republican colleagues, Sen. Chuck Hagel said Thursday he plans to support short-term federal loan guarantees for U.S. automakers.

The consequences of financial failure of the Big Three auto companies would be “astoundingly disastrous,” Hagel said, and would ripple through every community in the country.

Car dealers, banks and Main Street businesses in every town in Nebraska would be affected, he said.

Story Photo
U.S. Sen. Chuck Hagel, R-Neb.

Related Link(s):


12.11.08: Hagel plans Nebraska tour to thank residents

If Congress fails to act, the ultimate costs, including widespread unemployment, would be far greater at a time when the country faces its most grave economic challenges since the Depression, Hagel said.

Sen. Ben Nelson previously said he also plans to vote for the short-term federal loan package.

A $14 billion bill cleared the House of Representatives on Wednesday and is scheduled for a vote in the Senate on Friday.

All three Nebraska Republican House members voted against the legislation.

Hagel said he expects a majority of his Republican Senate colleagues will oppose a cloture motion that requires 60 votes before the legislation could be enacted.  Reaching that 60-vote threshold appears questionable, Hagel said.

As a member of the Senate Banking Committee, Hagel said, he has listened to all sides of the debate. 

Although he still has questions, he is “inclined to support the bill as it is written” and has informed Senate leaders on both sides of the aisle and the Bush administration that is his intent.

“In the short term, the need is so urgent that I think the government has to do something,” Hagel said. “This is not a smart time to turn our backs.”

The legislation provides access to “bridge loans” that would help beleaguered General Motors and Chrysler remain financially viable while needed restructuring and reorganization of the domestic auto industry is under way, Hagel said.

“This would allow the companies to borrow money to essentially get them through the end of March,” he said.

Ford has indicated its ability to survive on its own during the short-term period leading through the first quarter of 2009.

If the companies were forced into bankruptcy, Hagel said, American consumers would question whether they should buy U.S. cars that might not be able to be serviced in the future.

“Everything has to be on the table,” Hagel said, including labor costs, union contracts, pension plans, structural and strategic reorganization of the companies and product changes.

“The car companies need some time and resources to restructure and produce the kind of (vehicles) consumers want to buy,” he said.

Reach Don Walton at 473-7248 or at dwalton@journalstar.com.


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No Surprise wrote on December 11, 2008 12:27 pm:
" No surprise there, Chuck's a Dem at heart. "
Gerard Harbison wrote on December 11, 2008 12:33 pm:
" Hardly a surprise. Hagel hasn't bothered to maintain the pretense he's a conservative since he decided not to try to run for re-election. Thanks heavens we still have three conservative congressmen. "
JJ wrote on December 11, 2008 12:35 pm:
" What happens at the end of March? Are we going to be expected to pony up again. This is a mistake, Hagel is grandstanding and trying for an appointment in the new administration. Also, don't bother to go to his Senate website to e-mail him, he has already disabled that feature. I guess he does not want to know what the people he represents want, but that is not suprising, he never has. "
NoMoreBailouts wrote on December 11, 2008 12:44 pm:
" It's time to put an end to the bailouts and let market forces correct this latest snafu. Let the auto companies go into bankruptcy so they are forced to renegotiate contracts, especially labor. GM spends more on health care per car than it does steel! "
Frances wrote on December 11, 2008 12:56 pm:
" Too bad Chuck isn't up for re-election. We will remember this vote, Ben.
When am I going to get a "BAILOUT???" "
Jeff wrote on December 11, 2008 1:23 pm:
" I support Mr Hagel not that I agree with any bailouts but look at the picture here we lose the big 3 and they go bankrupt we the people still end up bailing them out anyway. Look at the job loses, every community that has dealerships, the consequences are huge in my opinion. I support this way more than I did the bankers who send my 17 and 18 year old kids credit card application almost everyday of the week wake up people most of our kids are so in debt before they even go out and look for jobs. Maybe stop all the big corporates from moving all our factory work over seas look at the small town Dewitt Nebraska look at all factories thruought the US. Somewhere this all needs to stop!! But this goes much much deeper than Mr Hagels support of this bailout. But I guess all Republicans and Democrats need to point fingers at someone rather than working together for a better country. I don't figure any of the 5 comments above me have ever sat and watched your work go overseas and all they can do is point fingers at whether or not they are Rep or
Dem. Wake up look at the big picture and for once think outside the box!! "
Geezer wrote on December 11, 2008 1:39 pm:
" Hagel didn't seek reelection because he new he couldn't win. I don't know what the Republicans did to make him so mad but I am glad he is gone. Like Steve Peterson I hope he leaves Nebraska once and for all.... "
Maverick wrote on December 11, 2008 1:45 pm:
" For the conservative republican, this is a maverick approach. "
Galen wrote on December 11, 2008 2:33 pm:
" I just glad he's retiring....
On a related note - who's paying for his "Fairwell Trip" across Nebraska? Sure hope it's not the taxpayers... "
Gerard Harbison wrote on December 11, 2008 2:42 pm:
" Jeff: the auto jobs aren't going overseas, they're going to right-to-work states where labor costs are around half what they are in the UAW-organized plants. Bankruptcy will allow GM and Chrysler to reorganize and get out of their stifling union contracts. The people who will pay are the unions, whose greed is partly responsible for the mess, and GM and Chrysler's creditors, who voluntarily assumed the risk.

The stock market seems to have taken the news the bailout is dead with a reasonable degree of equanimity -- apparently, unlike Hagel, they don't think the consequences will be 'astoundingly disastrous'. But then Hagel's record as a prognosticator over the last 4 years has been astoundingly disastrous. This prediction is up there with his predictions that the surge would fail. "
Hilda wrote on December 11, 2008 2:58 pm:
" Sounds like a waste of money if Congress supports a bridge loan to nowhere. The automakers don't even have a viable plan to change, other than to just pay excessive bills they have incurred. Hagel might know putting a Band Aid on a problem that requires an amputation isn't good for the nation or taxpayers. If ever moral hazard is ignored, it would be demonstrated by supporting funding a loan of $15,000,000,000 to support a plan that is only a bridge to bankruptcy and may never be repaid.. There is still time for the public to weign in on this risky loan. "
Realist wrote on December 11, 2008 3:12 pm:
" Gerard is spot on. Any money given to these companies without a requirement to visit Chapter 11 is foolish. The UAW rules with a heavy hand and now then need to accept the consequences. Mike Johanns cannot get to Washington fast enough. "
nemo wrote on December 11, 2008 3:51 pm:
" you know most repubs would not have a problem passing this bill if there were more concessions from the union and less unrelated junk attached ( like a pay raise for federal judges). Maybe Hagel wants a union job. "
acetogen wrote on December 11, 2008 4:27 pm:
" What is not a surprise here is the Republicans opposing the bailouts. They are blaming the UAW for the ailments of the Big Three and of course, according to the Republican workbook, the weak must pay for the screwups of Wall Street and corporate mismanagement. Once the auto workers take the blunt of the pain then the GOP senators will do what is right for the country and vote for the $14B. Maybe they are playing the same game as they did in October, when some of their House caucus members "felt insulted" by speaker Pelosi. So once again, some more posturing is in order until Jan 20th.

The "right to work" states cannot absorb the entire workforce that the loss of the Big Three would cause to the northern states. It is 4:20 pm and Wall street alreday took a minor hit today -not that the DJI is the real economy - on news of what the GOP won't support the bailout.

The crash of Detroit is due to bad corporate management (no innovation), lack of a global marketing vision, and yes, the economy.

The money for the bailout was already apportioned for development of alternative technologies for automobiles.

BTW, other companies abroad are also requesting bailouts from their corresponding govts. in order to protect their domestic automakers. The US should not buy into the free market crap that got us into the Bush economic mess. "
whatever wrote on December 11, 2008 4:55 pm:
" Every country in the world with a auto industry is "bailing" out their industry. If we don't we will be at the mercy of foreign companies and will ultimately pay higher prices for automobiles if any of the Big 3 go under. There is no free market it's country verses country in economics and if you don't support your own you will lose. Having transplants in your country isn't the same thing as having an auto industry. And keep in mind the most severe criticism of the bailout is coming from politicians where the transplants have the plants. Also keep in mind great tax resources were diverted to "help" these transplant companies start out in this country. Reform of the union contracts needed? You bet, but Chapter 11 isn't an option. Frankly to not support this "bailout" as it is called is to be a complete and ABSOLUTE idiot and possibly a traitor. And by the way since NO AUTOMAKERS are making any money at this time why should ANY of them be allowed to make a dime in this country. And don't even start with the they "aren't making the cars people want" crap. It's absolute BS from the start. I also would like some examples of the BIG 3's lack of innovation and how the foreign automakers have been innovative the last few years. We can stop with the MPG race GM wins that award hands down. "
KCO Of Loincoln wrote on December 11, 2008 6:25 pm:
" I know most of you do not like the idea but then again I would bet when you find out about the 100's of jobs in Nebraska that support the auto industry are lost, then you would sing a different tune. Nebraska is just starting to feel the effects of the economy and you can expect layoffs to increase and once again I bet you all will yep because then you will be competing with those that had jobs supporting the auto industry. The US cannot afford to lose any manufacturing jobs anywhere. This nation is already nothing more than a consuming nation. Seems if we had any brains in our head we would change that. Bankruptcy may also take away billions of dollars of pensions. People about to retire would find thay have no retirement. So for those that think bankruptcy is the way you are mistaken.Bridge loans in the past have been paid off and with interest. Unlike the finacial wallstreet bailouts these are loans that will be paid back. I guarantee you that if this bridge loan is not made the results will be a disaster and the effects will be felt in Nebraska. "
whatever wrote on December 11, 2008 6:54 pm:
" Might want to add an update here, according to the Wall Street Journal GM has hired bankruptcy lawyers. It will be very interesting the next 24 hours. At any rate we may all get a prelude of what Chapter 11 will bring us ALL. "
Gerard Harbison wrote on December 11, 2008 7:04 pm:
" If we don't fork over $15 bn we're traitors? LOL! Chrysler is owned by Cerberus, a secretive and extremely rich private fund that refuses to invest any of its own money in the company, or even match the bailout! They consider too risky to loan their own money to the company, but we the taxpayers are supposed to loan ours?

I find it hilarious that leftists are willing to hand billions of dollars over to a group of incredibly rich private investors, just to preserve the UAW. "
Lincoln Taxpayer wrote on December 12, 2008 8:09 am:
" Have the city council talk to the auto makers about moving to Nebraska.
I know there are alot of people in Lincoln that would love to work for half of the wages the auto workers are getting paid now.
No that won't work with the taxes in this state the cars would end up costing twice as much. "
Big Red Economist wrote on December 12, 2008 11:43 pm:
" Relax and calm down, sports fans. If Ford, GM, and Chrysler go under, you'll still be able to buy Fords and Chevys--they will simply be made by other outfits that will undoutedly do a much better job of the whole thing than the parasite UAW and it's Big Three illegitimate children. "

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