Automakers Seek Federal Help, But Not 'Bailout' in Meeting With Bush

WASHINGTON – Auto industry leaders plan to stress in a White House meeting that they are not seeking any federal bailout, but want support on health care and trade issues that affect large manufacturers.

President Bush will meet Tuesday with General Motors Corp. Chairman and Chief Executive Rick Wagoner, Ford Chief Executive Alan Mulally and Tom LaSorda, President and Chief Executive Officer of DaimlerChrysler AG's Chrysler Group, in a gathering that has been delayed since last spring.

Auto industry leaders plan to tell Bush they do not want a bailout similar to the 1979 measure approved by Congress that helped preserve Chrysler Corp. Instead, they will discuss the spiraling costs manufacturers face on health care, the advantages Japanese automakers have because of a weak yen and their work to develop alternative fuel vehicles.

"We're not going into this meeting seeking specific relief for our industry," said GM spokesman Greg Martin. "We understand that we have to win in the marketplace but there are issues of national importance like health care and trade that affect the competitive balance."

All three automakers spend more on health care per vehicle than steel, which adds about $1,000 to the cost of a car built by the Big Three. GM, the nation's largest private provider of health care, spent $5.3 billion on health care last year for 1.1 million employees, retirees and their dependents.

Wagoner urged Congress last summer to provide a "vigorous and robust" prescription drug market, develop national health information technology and focus on high-cost, catastrophic cases among a small number of patients.

The automakers have also sought support on trade, arguing that Japan's weakened yen makes imported goods from Japan cheaper. Auto industry officials also noted that China is keeping its currency artificially low against the dollar, making Chinese goods cheaper in the U.S.

"It's just so important that the governments around the world ensure that the market sets exchange rates," Mulally told the Detroit Free Press editorial board last week.

Bush is meeting with Japanese Prime Minister Shinzo Abe on Saturday in Vietnam. Kevin Reale, research director for Boston-based AMR Research, an industry consulting company, said the proximity to the meeting gives automakers the chance to urge Bush to discuss "how to level the playing field on how it relates to currency."

Sen. Carl Levin, D-Mich., said Monday the Bush administration needs "to understand — and I hope the Big Three will be blunt and direct with the administration — that their competitors are not companies overseas. Their competitors are countries overseas."

The industry shares many of the same views as Bush on alternative energy. The Big Three are doubling their production of flexible-fuel vehicles, capable of running on blends of up to 85 percent ethanol, by 2010.

The companies have faced hardships while Japan-based Toyota Motor Corp. is enjoying soaring profits. A report in The Wall Street Journal on Monday said Toyota plans to capture 15 percent of the world car market by 2010 in its quest to unseat GM as the world-largest automaker.

Ford, the nation's second-biggest automaker, posted a $5.8 billion third-quarter loss — its largest in more than 14 years — while GM reported a loss of $91 million in the third-quarter, a sign of improvement after posting a $1.6 billion loss during the same period last year.

Chrysler Group had a $1.5 billion third-quarter loss, but it was helped by profits at its parent company DaimlerChrysler.

GM and Ford are both engaged in large downsizing plans. GM has persuaded about 35,000 hourly workers to leave the company under early retirement or buyout plans and Ford has offered buyouts and early retirement packages to all 75,000 U.S. production workers. Ford hopes to reduce its hourly work force by 25,000 to 30,000 and is expected to shutter 16 plants.

Bush drew some flak in Michigan when he told the Wall Street Journal last January that automakers need to manufacture "a product that's relevant." White House spokesman Tony Snow said Monday that Bush would "express his support for the American auto industry" and "listen to their concerns."

The meeting was tentatively planned for last May when the Big Three executives met with congressional leaders, but it was postponed because of scheduling conflicts. Attempts to reschedule last summer were unsuccessful.