Struggling U.S. Carmakers Take Appeals To Bush

Companies want help with overhead and Asian competition.

The bosses of the three Detroit car giants were to appeal to President George W. Bush on Nov. 14 for help to tackle their crippling overheads and lift their competitiveness against an Asian onslaught. The chief executives of General Motors Corp., Ford Motor Co. and DaimlerChrysler AG unit Chrysler were due to present their case to Bush at a long-sought White House meeting. The Nov. 14 meeting will include Treasury Secretary Henry Paulson and Al Hubbard, director of Bush's National Economic Council.

The companies insist they do not need a bailout to overcome hefty losses, but argue that government help in such areas as healthcare and pension costs could ease the burden they face in competing with the likes of Japan's Toyota.

Trade policy was also likely to feature in the Detroit bosses' session with Bush, with U.S. carmakers long complaining that Japan's government depresses the yen's value to boost the competitiveness of Japanese exports.

Ford boss Alan Mulally said Nov. 10: "What I'm looking forward to is just sharing with him the state of our industry and also talking about competitiveness going forward." Along with Mulally, GM's Rick Wagoner and Tom LaSorda of Chrysler were expected to appeal for more government incentives to develop fuel-efficient and hybrid vehicles, which have been a particular success for Toyota.

Toyota, Honda and South Korea's Hyundai have all advertised their U.S. production and investment as proof of their commitment to the domestic industry. But according to GM vice chairman Bob Lutz, "it's not the same as a fully integrated American auto company that retains the intellectual property in the U.S., has primarily American shareholders, so the wealth gets reinvested in the U.S."

After Ford and GM announced thousands of job cuts earlier this year, Bush urged the companies to make more "relevant" models and said they should not expect the kind of federal bailout that saved Chrysler from bankruptcy in 1979. The president may strike a more conciliatory note this time, White House spokesman Tony Snow indicated last week. Snow said Bush wanted to "reaffirm his support for the American auto industry and his support for its growth and success."

Bush would "also thank them for some innovative activities such as creating flex-fuel vehicles and hybrids" that help the U.S. "wean ourselves from an addiction to oil, especially foreign oil," Snow said.

"We need a government that's a partner with the auto industry and manufacturing sector," said Carl Levin, the influential Democratic senator for the automakers' home state of Michigan. "Our companies do not compete with foreign companies. They compete with foreign governments," he said.

The auto leaders were also likely to press Bush for the government to scrap controversial duties on a type of steel used extensively in their industry. A government trade panel is reviewing the 13-year-old duties and could allow them to expire if it says they are no longer useful to the U.S. steel industry. A final decision is expected next month.

Copyright Agence France-Presse, 2006

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