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Bailout for U.S. automakers gets grudging support locally
Wednesday, December 10, 2008

At auto dealerships and in office towers, at local universities and in congressional offices, cars were on the brain yesterday, as lawmakers debated the finer points of an emergency loan package for the Big Three automakers.

The fates of Ford Motor Co., General Motors Corp. and Chrysler LLC as we know them hang on the outcome of the proposed $15 billion loan deal, which helps the carmakers -- especially GM and Chrysler, both in worse shape than Ford -- survive in the short term.

Among the region's congressional delegation, distaste for yet another rescue plan is apparently outweighed by the necessity of the arrangement.

"Given the option of this loan versus doing nothing, the taxpayer benefit may be greater by going through with the loan," said U.S. Rep. Jason Altmire, D-McCandless. A report from the Government Accountability Office suggested that the increased cost to the nation's safety net -- namely, the unemployment benefits and medical care consumed by jobless auto workers -- would cost almost as much as the proposed loans.

Back home, the Big Three's tentacles reach deep into the Western Pennsylvania economy. Most obvious are the dealers themselves, some of whom have been watching the Capitol Hill drama with indifference.

No sense fretting about what they can't control.

"I'd be a lot more worried if I was at a GM dealership," said Tom McDonald, general manager at Kenny Ross Ford South along Route 88. Ford, partly because it runs its own financing arm, has more cash on hand than either GM or Chrysler.

Still, Mr. McDonald acknowledged that one eventual outcome of the D.C. talks is that the number of domestic auto dealers will shrink. He noted that there are several Ford dealers within a short drive of his own.

"That's all I'm concerned about," he said.

U.S. Rep. Mike Doyle, D-Forest Hills, is more concerned about the Pennsylvania jobs that are at stake -- as many as 100,000 of them are in some way tied to the auto industry, including jobs at U.S. Steel Corp. and PPG Industries' auto glass division. Yesterday, Mr. Doyle was eyeing a letter he'd received from Kennametal Inc., urging passage of a loan bill and stressing the auto industry's importance to the regional economy.

For that reason above any other, "it doesn't make sense to let it fail," said Mr. Doyle.

"These are jobs that are sustaining families."

Some ties to the auto industry are less direct. For example, GM is a big corporate sponsor of research and development studies at schools across the country, including Carnegie Mellon University. CMU has two major programs tied to GM funding -- one is the school's ongoing study of "smart" vehicles, the other is a $5 million, five-year program to develop an autonomous vehicle, a partnership announced in June of this year.

In 2007, GM and CMU also teamed to win first place in the DARPA Urban Challenge, a competition sponsored by the U.S. military to see which team could build a vehicle that could complete a 55-mile course.

The Big Three's importance to the region is why it's important to guarantee that the loan money will be spent domestically, and not to rehab manufacturing plants in South and Central America, said U.S. Rep. Tim Murphy, R-Upper St. Clair.

"It is not intended to support factories around the world," Mr. Murphy said of the loan plan. If Brazil or European Union countries "are concerned about their factories, they can make their own investments," he said.

Mr. Murphy, like his Democratic counterparts, said he has received varied feedback from constituents. Some say the automakers should be saved even at great cost to the taxpayers.

Others say, let the dinosaurs fail.

"There are a lot of emotional reactions [to] executives flying in jets, big paychecks," he said.

Bill Toland can be reached at btoland@post-gazette.com or 412-263-2625.
First published on December 10, 2008 at 12:00 am