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Talks Collapse for Auto Bailout; Gettelfinger Holds Press Conference

Aired December 12, 2008 - 10:00   ET


HEIDI COLLINS, CNN ANCHOR: It is Friday, December 12th.
Hi, everybody. I'm Heidi Collins. You are in the CNN NEWSROOM.

Talks collapse, which means no emergency loans for the struggling auto industry, at least not from Congress. The vote in the Senate was blocked largely by Republicans last night. They wanted the auto workers union to agree to certain concessions by a certain date. Auto workers now looking to President Bush for a lifeline. A statement from the White House indicates President Bush is considering his options, including using money from the $700 billion financial bailout program.

We are waiting for UAW leaders to speak as we've been telling you, live from Detroit today. And when they do, of course, we will take you there right away.

Meanwhile, world markets tumbled on news of the Senate's inaction last night. Here now are early numbers from the New York Stock Exchange. The Dow down about 97 points at this very moment.

A lot of people working on a lot of angles this morning on this story, including CNN's Stephanie Elam. She's at the New York Stock Exchange and our own Kate Bolduan is on Capitol Hill.

First to you, Kate. It sounds like lawmakers are going on the defensive this morning about all of this.

KATE BOLDUAN, CNN CORRESPONDENT: I can tell you, we can probably expect, Heidi, today to see a lot of pushing back, a lot of people on the defensive, both trying to put the blame on the other side. Republicans on Democrats, Democrats on Republicans. Because this doesn't look good for anyone as these talks really ramping up, ramping up last night and then failing. As we now know these emergency loan legislation for the automakers is effectively dead here on Capitol Hill. This is after that 52 to 35 procedural vote late last night that came after hours of behind-closed-doors negotiations.

Heidi, back to you.

COLLINS: Yes. Sorry about that Kate, I'm sure they were telling you in your ear that we now have a live shot. We see UAW President Ron Gettelfinger there. So let's go ahead and go live now to Detroit live for this press conference.

(JOINED IN PROGRESS) RON GETTELFINGER, UNITED AUTO WORKERS PRESIDENT: ... important to get together and share some of the events that occurred yesterday. First of all, I want to begin, though, by saying that we do appreciate the positive statement that was released by the White House this morning, where they say that they are reviewing all options that are necessary including the use of the troubled asset relief program to assist the industry.

Also, I want to mention how pleased we were with the vote in the House. All of the hard work that was done there by the leadership as well as the leadership in the Senate.

As everyone is well aware, the auto industry around the world is in peril. There's no question other countries have stepped up to help their industry, and the United States has been a little slower to react. Our union, with a lot of hard work, has recognized that the industry is in a restructuring mode, and we have known that for a while.

You've heard us talk about what we did in '03, '05, '07 negotiations. And then just this past week to assist our industry and to put them in a more competitive position. Unfortunately the Senate Republicans led by Senator McConnell rejected the bipartisan legislation and restructuring process that had been agreed to by the White House. Yesterday morning I received a call from Senator Bob Corker laying out some stipulations that he was going to introduce in the Senate. And asked me if the UAW would be willing to consider entering into talks with him.

At that time we recognized that it was very risky to do this. First of all, we did not know who Senator Corker was representing on the Republican side, and if he could reach an agreement, if he could deliver votes. We also recognized that the other parties involved, the other stakeholders involved, if you will, were not being held to the same standard that organized labor was.

In fact, organized labor was being treated with a double standard, the same as what we saw in the financial markets, the double standard that was there. So the other parties weren't there. Senator Corker had already had discussions with the companies at that time and basically had put down what he wanted to see happen or what he felt needed to be -- to happen.

In addition to that, we knew that to negotiate with an individual senator was a difficult challenge for us when we still had to negotiate with the companies. And we knew that there would be a number of people involved in the discussions with the senator who really didn't have a knowledge of the industry and from the our personal standpoint, this was going to mean long-distance negotiations. In other words, we would have our people on the ground in Washington communicating back and forth with us by way of phone.

And then the other thing was, quite frankly, we wondered if we were just being set up. And I say that because there's no question the UAW has demonstrated leadership throughout this process. And there were some in the Senate who we felt resented that. But knowing all the risk that was there, we were still willing to go the extra mile and negotiate with Senator Corker on modifications to the bill that the White House had agreed to and had already been approved in the House of Representatives.

We -- our people believe -- that were on the ground and the negotiations reached a tentative agreement with Senator Corker on those modifications. But the Senate caucus rejected that agreement. The tentative agreement with Senator Corker provided that bondholders and retiree health care VEBA would both have to exchange a large portion of our claims for equity or stock in the companies.

And as Senator Corker recognized, these agreed-to changes would have made an enormous difference in the balance sheets of the companies and largely solved their financial problems. Senator Corker admitted to our people on the ground there that the other discussions over wages were largely about politics within the GOP caucus. And we went so far as after having stood up at a press conference prior to going to Washington and saying that we would eliminate the jobs bank, it was insisted that we put that in that bill.

Now, we stood up and committed ourselves, and we like to be credible people. I often say to the companies, you show us where we violated any agreement that we have reached with you. But I personally took that as an insult. However, in order to move this process forward, we agreed to put that language in there. The tentative agreement with Senator Corker also provided that any restructuring plan approved by the auto czar would have to ensure that the wages and benefits paid to active employees at the domestic automakers would be competitive with the compensation paid by the foreign transplants, after taking into consideration, the transition to newer employees earning lower wages and benefits.

If the auto czar determined that this would not be accomplished under the restructuring plan, the companies would have been required to file for bankruptcy or to have their money pulled back. And let me mention on wages. I think this is very important. In 2007 there were two employees at the Toyota Motor Company in Georgetown, Kentucky, who were terminated because they found on their computer a five-year plan that Toyota had put out, talking about their wages and benefits.

Those employees both remain fired today even though the local board that Toyota has recommended that one of those workers not be fired. But in response to a question that was put on their hotline, Toyota on January 23rd of 2007 at 11:27 a.m. stated that their wages were better than the big three. And their benchmarking shows that the typical premium paid by the auto industry is 50 percent above manufacturing wage. Toyota claimed to exceed that rate by $3.00 an hour.

Additionally, there was an article put out by the "Detroit Free Press" on January 31st of 2007 and with the headline said "UAW losing pay edge," and it referred specifically to the Toyota Motor plant that paid bonuses of $6,000 to $8,000 in Georgetown, Kentucky, and it brought it up to an equivalent of $30.00 an hour. Additionally, Toyota put out on Thursday and Friday, September 25th and 26th of 2008 that with their bonuses, their workers made $30.45 an hour.

Under our agreement, it's $28.12 an hour. So when you say that the wages and the benefits have to be equal, in discussions I had with Senator Corker, I made it clear, and he understood, that this was mixing apples and oranges. This is just simply subterfuge on the part of the minority in the Republican Party who wanted to tear down any agreement that we come up with.

You know, as I indicated, the Senate caucus rejected this tentative agreement because of that issue, that they demanded that the wages had to be slashed. In fact, I had indicated to Senator Corker, that if we were going to use Toyota as a benchmark, then our research department was prepared to go to Toyota, not with a leap of faith, but dealing with the facts, go in and review their entire wage structure.

In addition to that, if we were going to use them as a benchmark, we should be permitted to see how they paid their management. If we did that, we should also see their dealer contracts as well as their supplier contracts. That only would make sense to me instead of somebody saying, here's the wage and that's what you have to agree to. However, they did add a couple of other companies then that they wanted to use as a benchmark. The demand by the Senate GOP caucus would have, no question, treated workers differently from every other stakeholder, instead of leaving it to the auto czar to work out the timetable and a mechanism for implementing sacrifices by all of the stakeholders. And the GOP caucus tried to mandate the precise restructuring terms for workers.

In effect, that means that the GOP caucus was insisting that the restructuring had to be done on the backs of workers and retirees rather than having all stakeholders come to the table. And from the beginning, the UAW has recognized, made it clear and so testified in front of the Congress of the United States that all stakeholders had to be willing to make sacrifice. Even though we have stepped forward on three major occasions.

And as I've said many times, we're on third base and the other stakeholders are not even in the ball park. We've already stepped forward and made enormous concessions. But as we made it clear last night, we were prepared to make further sacrifices. But we could not accept the effort by the Senate GOP caucus to single out workers and retirees for different treatment and to make them shoulder the entire burden of any restructuring.

And now that the Senate GOP caucus has repudiated the positions taken by President Bush and by Senator Corker, and scuttled the legislation to provide the emergency bridge loans to the automakers, the only options are for Treasury Secretary Paulson to exercise his authority to use the T.A.R.P. funds to provide assistance, or for the Federal Reserve to take action. And the UAW calls on Secretary Treasurer Paulson or the Federal Reserve to use their authority to prevent the eminent collapse of the automakers and the devastating consequences that would follow for millions of workers, retirees, for families across our nation and for our economy as a whole.

So with that I very much appreciate the media being here this morning. We appreciate the reporting that you have done on these issues, because from where we're standing, I can see how no one could level criticism at the men and women of the UAW.

Now, I recognize that there are some out there who would do that. But if you sit down and look at the facts -- and I have stated the facts here this morning to you as I believe them to be. If you look at the facts, the men and women of the UAW care about our country. And, by the way, we will continue as a union to put full energy in to bringing a successful resolve to this situation. So with that we're going to take a few questions here this morning. And then we got work that we need to do.

QUESTION: Mr. Gettelfinger, I know you've heard this before. Is there a possibility that there was a master plan that this movement was all part of an effort to oust or break the UAW, to keep them out of right-to-work states?

GETTELFINGER: Well, I'm going to answer that question this way. I have in my hand a document that was provided to us. I'm going to say up front that the "from" was deleted from it when it was given to us and the "to." It's an e-mail. It was an action alert called "auto bailout." It says, and this was Wednesday, December 10th, 2008 at 9:12 a.m.. Today at noon, Senators Ensign, Shelby, Coburn and DeMint will hold a press conference in the Senate radio TV gallery. They would appreciate our support through messaging and attending the press conference if possible.

The message they want us to deliver is, one, this is the Democrats' first opportunity to pay off organized labor after the election. This is a precursor to card check and other items. Republicans should stand firm and take their first shot against organized labor instead of taking their first blow from it. Number two, this rush to judgment is the same thing that happened with the T.A.R.P. members do not have an opportunity to read or digest the legislation, and, therefore, could not understand the consequences of it.

We should not rush to pass this because Detroit says the sky is falling. The sooner you can have press releases and documents like this in the hands of members in the press, the better. Please contact me if you need additional information. Again, the hardest thing for the Democrats to do is get 60 votes. If we can hold the Republicans, we can beat this.

And again, I will stipulate that when I received this document, this is the way I got it. The "from" is not there, and the "to" is not there. But our sources, and you understand sources, our sources indicate to us this was put out by staffers on the Republican side of the aisle.

QUESTION: Is there any danger that because there was no agreement last night, and I know you said that you felt that there was a double standard there, but now that if the company -- if one or two of the companies go bankrupt, there's a chance that your contracts with them could be null and void and they could take that standard at you when they don't have to deal with the actual contract because they're bankrupt, so how do you deal with it then?

GETTELFINGER: We've said all along bankruptcy is not an option. It won't just be one company that's impacted. It will be two, three, others, the supply bases, they'll all be impacted. Every auto manufacturer in this country, some much worse than others. That is the very reason that we have worked tirelessly. These officers, our board, local union leadership, our membership have worked tirelessly to try to bring a successful conclusion to this.

QUESTION: You know that if they do go bankrupt, what will you do?

GETTELFINGER: If they go bankrupt, let me tell you, they won't just go bankrupt, they will go into liquidation. We have said that. We have bankruptcy practitioners that made that unequivocally clear to us. I think that's one thing that Senator Corker truly understands, that bankruptcy is not an option here.

QUESTION: Ron, you mentioned the White House statement when you started out your news conference here. I've been told by my station that Mr. Corker, while you were talking, more bulletins running on the wires including one that says the Treasury Department is ready to prevent the collapse of the Detroit three automakers because rescue efforts in Congress have failed. That is coming from Treasury Secretary Paulson.

So my question is twofold. What's your reaction to that? Does that mean everything that has happened in Congress and in the Senate last night is now moot and you're starting fresh?

And number two, does that mean that you have to be in a position to negotiate with the White House and the Bush administration over terms that are acceptable, or do you fall back on the agreement that Democrats and the White House had yesterday before all of this new business with Senator Corker?

GETTELFINGER: Well, first of all, I don't think that we would be in negotiations with the White House. We were not in negotiations with the House of Representatives. It was only the Republican caucus in the Senate that forced us into negotiations with the Senate. Secondly, I think it's great news, the response we've been getting out of both the White House and out of Treasury. So we're prepared to move forward. That still means there's a lot of work to be done here.

I'm not even sure what this means, how much they're talking about, any terms or conditions that are associated with it. But I do know this: it's important for the White House to exert its influence to get this money released as quickly as possible. We cannot afford for there to be a run on the banks, if you will, at these companies. And that means simply the trade credits, the suppliers, are shortening their terms, are wanting cash on delivery.

QUESTION: Just by way of follow-up, if the White House says we want to negotiate some terms, you would facilitate that?

GETTELFINGER: I tried. I tried so hard. But i don't believe the White House would ask that. That's my personal opinion. I think that the White House recognizes that we've been very responsible from a standpoint of organized labor. And look every company that testified in front of the Congress talked about the competitive agreement that we had negotiated with them and it was a matter of phasing things in.

But what they were saying to us last night would be like saying to General Motors, in your plan you say you're going to take out X number of dealers. You have to take those dealers out by this date, and that's it. It's ludicrous. So it's a very complicated process. And I think the White House understands that.

COLLINS: All right. Quickly, want to jump in here briefly because we want to do some explaining on one of the questions that one of the reporters there in Detroit -- you're listening to the UAW president Ron Gettelfinger there talking about what has happened with the Senate side of this bailout. Stephanie Elam is standing by.

Because Stephanie, the Treasury Department has released a statement now. Go ahead and tell us a little more about that.


We did get some information here coming from the Treasury. Basically saying that because Congress failed to act, because the bailout bill for the auto sector did not go through the Senate last night, they're poised, standing by and ready to help out the auto industry before Congress reconvenes and so that they can then address the long-term viability. Basically it sounds like it's paralleling what we heard from the White House, saying that they're poised to help and use money from the T.A.R.P. fund, the $700 billion bailout money that was set aside for the financial companies, looking to use some of that money here.

Obviously this is good news to the union. Obviously it will be taken as good news throughout all of Detroit. So we've been watching to see how the markets would react.

When the White House statement came out, the markets actually came back a little bit off their session lows. We're still off session lows which we hit right when the markets opened. But right now, the Dow up 182 points, 8439 there. So still having solid loses for the day. GM and Ford are solidly in the negative still at this time, Heidi.

COLLINS: Yes, I would just say, to add to that, Congress is on pro forma until December 16th. In case, you're not familiar with that term. Everybody at home that means that they could come back at any time if they are called. But as of right now, Congress is in recess. So we will continue to follow that side of the story as well. Stephanie Elam, thanks so much. We want to take you back to Detroit now as the UAW president, Ron Gettelfinger, continues to take questions from the media.

Let's listen.


GETTELFINGER: -- we know who they are, that believe that workers are expendable, that wages mean nothing, and oh, by the way, they're going to be getting a raise January 1st. But they use taxpayer dollars to subsidize our competition. We can't operate this way as a country.

QUESTION: You're saying wage cuts are not an option?

GETTELFINGER: Look, I'm very careful what I say. There are other ways within our contract to be very competitive. These vice presidents behind me have always been working extremely hard. We gave a commitment. We gave a commitment to these companies, to the people of America, what we were going to do.

We have all been sitting down working to immediately get out from under the jobs programs. We have already engaged our team on the VEBA because we would stretch out the payments. But then when the Senate got involved, we didn't even know if we needed to keep that commitment anymore. So for me to -- it's premature for me to say what it is we would do as a union.

But I can say this: quality, safety, productivity, we're there. We've got some plants that we need to upgrade. We're going to do that. We have been working hard forever. It's just easy to take the union and blame us for everything. And, as you can see, some of those in the Senate who were quick to scuttle this plan want to say it's the fault of the UAW. All they want to do is say, wait a minute, workers shouldn't have a voice in their workplace.

You know, a union is the only instrument that gives working men and women any form of equity and justice in the workplace. It gives them a voice at the table. And it's very clear that there are those who would do away with that tonight if they could.


QUESTION: -- communication from the companies how long you have? I mean if we don't hear something from Treasury by the end of the day or the Federal Reserve by the end of the day, does some ball start get rolling?

GETTELFINGER: I've had discussions with both Mr. Wagoner this morning and Mr. Lesorta. The bigger concern right now is we need to get the commitment. They know when they make their payments. But we need to satisfy the suppliers that there is going to be a tomorrow. I think the run on the banks is a much bigger issue than anybody here realizes.

If suppliers believe they can't operate, what are they going to do? They're not going to deliver the goods. If they don't deliver the goods, then the plants go down. We can't have that. So the urgency of the situation is to hit the supply base. General Motors has made it very clear they cannot make it out of the month of December. And Chrysler, they're very close with General Motors.

QUESTION: General Motors, what are they telling you, year end?

GETTELFINGER: Some of the conversations I had with General Motors obviously is confidential. We have credibility. We're going to protect that. Let me just leave it at this, we need action sooner rather than later.

QUESTION: Ron, is there anything that the UAW can do to help them limp into January if they have to?

GETTELFINGER: We did our research department if we work for nothing. You got to remember, we're 10 percent of the labor cost. If we worked for nothing, it wouldn't help them limp into January.

QUESTION: Ron, is there a point in time that -- with the two- tier wages that you would reach parity with the foreign transplants down the road, 2010 or at some point? At what point do you reach that? In other words, if you were just quibbling over months with the senators, the Republicans, last night, at what point do you reach that point of parity?

GETTELFINGER: With the downturn in the economy right now, with vehicle sales falling from 16 down to 10.8 or so two months in a row, it's kind of difficult to answer that. The reason is we have 3,000 entry level workers at General Motors who will all be laid off on February the 1st. Those 3,000 entry-level workers were helping to level that playing field immediately. That's one of the complex things about the industry that I don't believe a lot of folks in the Senate really understood.

QUESTION: OK. Do you see any way this can get resolved even with Congress this week, that they could come back? Was there any talk about that, that there's any window of opportunity there that something could done?

GETTELFINGER: No. See, what was going to have to happen here, if I understand it correctly, we needed 59 votes for closure. We didn't have it in the Senate. We did have a majority in the Senate. Since the new bill or the amendment had been introduced, that would have meant the house was going to have to come back. Then they'd end up going into a compromise committee.

So in effect, the minority in the Republican Party that put up a wall here made it very, very difficult for everybody involved. And oh by the way, you know, it's a Christmas holiday season coming up and I don't think they will be real happy to ask them to come back to Washington anyway because I did hear a lot of talk about flights back home and all of that.

So, I think the president, working with Treasury will now need to decide what it is that they're going to do and how long they want to tie the companies over. I think the White House demonstrated by working with Senator Reid and Speaker Pelosi, that they wanted to get this thing worked out. They did not just want to pass it off to the next administration.

And I think they demonstrated that by their actions. It's just unfortunate that the Republican minority decided that they wanted to go against their own president, that they wanted to go against what had been compromised, and a bill that would have been good for all of us involved.

QUESTION: Ron, beyond the letter you shared, the e-mail about the Republican press conference. In your view, to what extent was this political payback for Democratic support (INAUDIBLE) or, UAW support of Democratic candidates?

Were they getting even?

GETTELFINGER: I think -- were they getting even? I don't know. I think it -- there are two factors that come into play here. One is -- and I think even more than the fact -- maybe they're coupled together.

But, one of them is we are an effective political organization. But more importantly, we're a union. And you know, the right wing in this country have basically painted the word union to be a very negative word. We've also been up against national Right-To-Work Legal Defense Foundation, who we don't even know who they are because we can't find out who their contributors are.

So there's all of that that comes into play. But there's no question -- and I think at the end of the day, who was the minority in the Senate representing, regardless of their motivation. They thought perhaps that they could have a two-for here maybe. You know, pierce the heart of organized labor, while representing the foreign brands.

And if you just look at Alabama, we went through this before. And, by the way, our country, our taxpayers have put over $3 billion that we know of -- and this is money on the top -- to subsidize the foreign brands to come here. They weren't asked to pay a penny of that money back, and the taxpayers actually weren't asked to approve it. It's just a state-by-state. And once again, want to go through Alabama here.

And if you look at Hyundai, they've got $252 million, Toyota got $29 million, Honda got $158 and Mercedes got $253. Now, that's what we know. And I want to go back to the Peter Karmanos editorial he put out. In addition to the $253 million, they trained the workers, they cleared the land, they put in the utilities. They agreed to buy 2,500 automobiles. And on top of all of that, they gave them land worth the value of the plant that they were going building.

So, these are just numbers we know. So, I think enough said on that. It's pretty clear to us what's going on here. And by the way, we received a lot of calls from the workers at the foreign transplant operations who are very worried about what was going to happen here. Because they appreciate the UAW. They may not be organized and they may be afraid to sign a union card, but they see what's happening to us and they know it's going to have an impact on them.

And has I indicated to you, Toyota has already introduced in one of the papers here, had quite an extensive article on it, a five-year plan talking about how they were going to reduce the costs. OK. Anything else before we go here, real quick?

QUESTION: (OFF-MIKE) $253 million?


COLLINS: All right. We have been listening for quite some time to UAW President Ron Gettelfinger, saying a number of fascinating things regarding the bill that did not pass the Senate last night.

And while he was talking, just want to remind you of what took place in a statement that came out from the Treasury Department. Going to go ahead and put it on the screen. I believe we have it. If not, let me just go ahead and read it to you. Again, this took place just a couple moments ago.

Treasury Department is saying this:

"Because Congress failed to act, we will stand ready to prevent an imminent failure until Congress reconvenes and acts to address the long-term viability of the industry."

A quick reminder that Congress is in recess. It could come back at any time if they are called. But they're in pro forma on December 16th, there. So, what does all that mean? We certainly have a lot to talk about here. Some very, very interesting comments. Want to go ahead and take a moment now to bring in Neal Boudette. He is the "Wall Street Journal's" Detroit bureau chief.

Boy, if you've been listening like I have, Neal, some amazing things. It sounded to me at the very beginning of this press conference that Gettelfinger is saying, we spoke with Senator Corker, and we pretty much had an agreement. We understood one another. And then went on to the Senate and the whole thing died.

NEAL BOUDETTE, DETROIT BUREAU CHIEF, "WALL STREET JOURNAL": That's correct. You know, Senator corker from Tennessee, was very tough on the big three CEO's when they were in Senate -- in hearings. And he was also tough on the UAW.

And it sounds like, from what Ron Gettelfinger is saying, they had come to pretty much of an agreement and it was scuttled by a minority of mainly southern Republican senators and states where they have foreign auto plants, Toyota, Mercedes, Honda, Hyundai, as Ron Gettelfinger just said.

COLLINS: Yes. There's an awful lot of discussion as well, from Ron Gettelfinger in answering some of those questions from the press there about wages. We know -- we've heard in the past, at least over the last couple weeks as we've been going through this whole thing, about this two-tiered wage system.

Tell us a little bit more about that and what the sticking point was?

BOUDETTE: Sure. Well, the way the UAW contract is set up now, veteran workers continue what they have been making for a while, which is roughly about $28 an hour.

COLLINS: $28.12 I guess?

BOUDETTE: Right. And under the contract they signed a year ago, the auto companies are able to offer buyouts and early retirements for the older workers so they would leave the company. And they're able to replace them in certain jobs with new workers who only make $14.00.

So over time, you bring in these lower -- these workers at the lower wage and your average cost comes down dramatically. At the same time they're also doing things to relieve the automakers of health care costs. And the net effect of that is that by 2010, the big three should have labor costs very competitive with their foreign competition.

COLLINS: Well, that's true. And then he also brought up this question and you heard him a few minutes ago. He wants to know -- we keep talking about this Senate minority there -- who they were really representing.

What exactly does he mean by that?

BOUDETTE: Well, think what he was saying there about Senator Shelby from Alabama, that Alabama has a Honda plant, a Toyota plant, Hyundai and Mercedes. And that Senator Shelby was looking out for the people in his state. I don't know if any of these automakers contribute to his campaign, but that's a good question to ask.

COLLINS: So, he's just accusing him in particular, Senator Shelby, of personal gain almost or politics as usual.

BOUDETTE: Well, I think he's accusing Senator Shelby of supporting his constituents, yes.

COLLINS: All right. Well, what are we going to see happen next year? You know, we've heard very interesting comments, not only from the Treasury but from the White House, as well. Going to take just a second to read something that we have coming to us from Dana Perino, that says this and I'm sure you've heard it.

"Given the current weakened state of the U.S. economy we will consider" consider, being the key word, "other opinions if necessary, including use of the TARP program to prevent a collapse of troubled automakers."

What do you make of that?

BOUDETTE: Well, I think George Bush is very concerned about the final months of his presidency. He's had eight years. There's plenty in those eight years for people to criticize.

What I've heard from people who have been talking to Congress is that there's a fear in the White House that, if the auto industry collapses in his final days, he'll go off in history as George W. Hoover. That was a term that somebody actually told me. So, I think they see they can't have this happen in the final days and be the final chapter of the Bush presidency. So, now they'll relent and give up their opposition to using the money in the TARP fund.

COLLINS: Yes. That being said though, everybody knows that the auto industry has been in trouble for a very, very long time.


COLLINS: All right. Neal, we sure do appreciate your insight today. Our Detroit Bureau Chief from the "Wall Street Journal."

Thank you, Neal.


COLLINS: We'll be back in a moment here in the CNN NEWSROOM.



GETTELFINGER: Knowing all the risk that was there, we were still willing to go the extra mile and negotiate with Senator Corker on modifications to the bill that the White House had agreed to and had already been approved in the House of Representatives. We, our people believe, that were on the ground in the negotiations, reached a tentative agreement with Senator Corker on those modifications. But the Senate caucus rejected that agreement.


COLLINS: So where is Senator Bob Corker now? That seems to be the question, today certainly. And our CNN Money Team is following all the developments on this sale bid by U.S. automakers to get that taxpayer bailout loan. So, what happens now?

CNN's Allan Chernoff is joining us now, live from New York on all this. There have been these statements that have come out, Allan, even while Ron Gettelfinger there was talking. One from the White House saying they're considering using the TARP money and one from the Treasury saying, that they are standing by ready to step in.

ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Heidi, let's consider the incredible irony of this situation. Only in our economic environment could we actually see this.

The auto companies and the UAW are laying all their chips right now on the Bush White House, on the Bush administration. They're basically saying, we've got to get that money somehow and the White House is now saying, yes, we're going to find it somehow. And they're talking about the TARP. That, of course, the Troubled Asset Relief Program. The money that was supposed to have been used to buy all these financial instruments that got Wall Street investment firms in big trouble. Well, now they're looking to redirect that to the auto industry, and the Treasury Department is saying, yes, we're prepared to do exactly that. GM just told me a few minutes ago that they're very encouraged. And they've just released a statement. Let's have a look at that.

They're saying, they "... are prepared to work closely with the administration on possible solutions that could prevent further damage to our nation's economy and also allow us to embark on an aggressive restructuring plan for long-term viability."

COLLINS: Yes. Because, Allan, forgive my interruption, but we did here Ron Gettelfinger make a specific mention of GM. He said, you know, they can't make it out of the month of December.

CHERNOFF: Exactly. Ron Gettelfinger said it. He said bankruptcy is not an option here. The CEO of General Motors has repeatedly said that, that bankruptcy is not an option. Gettelfinger himself really said we'd really be talking about liquidation.

Well, hopefully that's not going to happen. But GM believes that it just can't be filing a Chapter 11 bankruptcy filing because that would taint the company, really turn people off from buying a vehicle.

When you buy a vehicle, you're making an agreement with a company for the long term. And that's really a major reason, they just don't want to do it. I asked GM, have you retained bankruptcy counsel? They wouldn't answer. But they said, we are considering all of our options here. Obviously, they're laying all their chips right now on the Bush administration coming through with this emergency money since the Congress hasn't done it.

COLLINS: All right. Well, we are watching very closely to get any more news coming from the White House or the Treasury Department, for that matter.

So, Allan, thanks for that.


A lot of news happening by way of the auto bailout that did not pass last night in the Senate. Who know's where it's going to go next. We're watching right here in the CNN NEWSROOM.


COLLINS:'s Poppy Harlow is standing by now to talk a little bit more about some of the developments that we have been sharing with you regarding, the auto bailout.

And Poppy, I know you were able to speak with the CEO of Auto Nation. How does all of that fit in? What do you have to say?

POPPY HARLOW, CNNMONEY.COM: You know, I spoke with him. His name is Mike Jackson. I spoke with him earlier today. He's head of Auto Nation, which they own the most dealerships, the most auto dealerships in the entire world. So, obviously he has a big stake in this. He wants to see a bailout for the automakers.

But, what he told me was really fascinating in terms of just what we've seen so far. Since September, we've seen the volume of cars sold in this country fall 25 percent, to what he calls depression levels. The lowest levels we've seen. If you look at a per capita basis, since the end of World War II. And he says that if we let one go, if we let GM fall into bankruptcy, the ripple effect of that, as we've been talking about is really dramatic.

And he says that if GM goes, Ford and Chrysler will go. He says bankruptcy then obviously, we know. He says it spreads through the suppliers and so on. And we've heard the number, two to three million jobs lost, if we do see a bankruptcy filing or a failure there. It's a big difference there of one or more of these automakers. But, his perspective was very, very interesting considering his dealerships obviously do rely on this. But he said, really, if you let one go, the rest fall.

I thought that was very interesting -- Heidi.

COLLINS: Yes. And Ron Gettelfinger, we heard him actually make mention of the suppliers in all of this. He said, we have to satisfy the suppliers. That there will, in fact, be a tomorrow.

HARLOW: Yes. You know, that's exactly right. And also adding on that, these suppliers are not just suppliers for U.S. automakers, not just for GM, Ford and Chrysler. They are suppliers for automakers around the world.

And he said to me, listen, Poppy, the ripple effect of this very quickly will go around the globe to Toyota, and to the the German carmakers, as well. So, it's not isolated here in the U.S.

And just one more point I want to bring in that was interesting. A lot of people say why $700 billion for Wall Street, for the financial firms and zero at this point for the automakers? There is a strict difference here between sort of systemic risk when you're talking about consumer credit and the entire global financial system and when you talk about unemployment. And that is the difference.

And you've got to remember that that $700 billion, a lot of it is going towards shoring up consumer credit for things just like this. For things like auto loans. So, there still is a connection here.

COLLINS: Yes. All right. Interesting. Also you mentioned what happens across the world, the ripple effect. And we did have a report from Frederik Pleitgen, in Berlin.

And people there in the business say, you know, we're very concerned about what's happened to the U.S. auto industry, at least at this point. Because we think people aren't going to buy our cars, either.

HARLOW: That's exactly right. This goes so far beyond the U.S.

And it was interesting, I was talking with Chris Isador, earlier today. He's a senior writer here. He was covering it all night, last night. And he said, listen Poppy, this is not a good day to be Toyota, or a foreign automaker. This is a bad day to be any automaker. This is not just about the U.S. and the Big Three -- Heidi.

COLLINS: Yes, very interesting. All right.'s Poppy Harlow for us. Thank you, Poppy.

HARLOW: A quick break here now. We'll be back in just a few moments in the CNN NEWSROOM.


HARLOW: CNN's Elaine Quijano has reporting now that President- elect Barack Obama has released a statement regarding what is happening in the auto bailout that as you know by now, failed in the Senate last night.

Let's go ahead and take a look at that. It says, again, from President-elect Barack Obama, "I am disappointed the Senate could not reach agreement on a short-term plan for the auto industry. I share the frustration of so many about the decades of mismanagement in this industry that has helped deliver the current crisis. Those bad practices cannot be rewarded or continued.

But I also know that millions of American jobs rely directly or indirectly on a viable auto industry. And that the beginnings of reform are at hand. The revival of our economy as a whole should not be a partisan issue. So, I commend those in Congress, as well as the administration who tried valiantly to forge a compromise. My hope is that the administration and the Congress will still find a way to give the industry the temporary assistance it needs while demanding the long-term restructuring that is absolutely required."

Once again, from President-elect Barack Obama, on the situation with the auto bailout. We will continue to follow this story of course, throughout the rest of the day here and probably the night on CNN. So, make sure you stay tuned everybody.For now, have a great weekend. We'll see you back here Monday morning.

CNN NEWSROOM continues with Tony Harris.