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US car industry renews bail out plea -

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US car industry renews bail out plea

The World Today - Friday, 5 December , 2008 12:34:00

Reporter: Richard Lindell

ELEANOR HALL: In the United States the car maker General Motors is warning that it may be forced
into bankruptcy if it doesn't receive a bailout from Congress.

All three major car producers are in Washington pleading for an immediate injection of
$US34-billion.

But some analysts say GM, Ford and Chrysler will end up needing $US125-billion to stave off
bankruptcy.

The Detroit Regional Chamber has been lobbying hard for government support. The Chamber's president
Dick Blouse has been telling our reporter Richard Lindell just what is at stake in the city at the
heart of the US car industry.

DICK BLOUSE: The car industry is very important to the economy of Michigan and certainly the
Detroit area. But more importantly what we are trying to express to Washington is the automotive
industry is extremely important to this nation.

We believe there are three-million jobs, direct jobs nationwide that are tied directly to the
domestic automobile industry.

RICHARD LINDELL: So what's the feeling on the ground? Does the recession feel more pronounced in
Michigan than elsewhere in the country?

DICK BLOUSE: Well it's interesting. We've been asked that question an awful lot in recent weeks and
what most people don't realise is we've been in a recession here for the last six to seven years.
So it's been a tremendous slowdown in business over that period of time and the rest of the nation
is kind of just catching up with us.

For example I've had a condominium for sale for two-and-a-half years and at a price 40 per cent
below the market rate that I paid for it presently. It's just been a very depressed economy in
Michigan.

RICHARD LINDELL: Well if Michigan has been in recession for the last six or seven years while the
global economy has been booming, is there really a future for the US car industry, because if it
can't make it in the best of times how can it make it through what is going to, what looks like to
be quite a prolonged recession globally?

DICK BLOUSE: We've made a lot of progress. That's what's ironic about what Washington is demanding.
They have developed with the UAW (The International Union, United Automobile, Aerospace and
Agricultural Implement Workers of America) a much different platform to operate from. They have
dealt with the legacy costs. It's just that all these things are going to take some time and that's
what they're trying to do; they're trying to get bridge money to get to that point.

RICHARD LINDELL: President Bush was quoted this morning our time as saying that he won't throw good
money after bad. That seems fair enough, doesn't it? The industry really needs to show that it's
going to have a viable future.

DICK BLOUSE: I believe that these folks have tried to demonstrate that. And again I go back to the
union agreements of over a year ago. There's tremendous restructuring in three tiered wage rates.
And VEBA (Voluntary Employees Beneficiary Association), they're dealing with the health insurance
for retirees. And they just all need time to get to that point.

So I think that was probably very unfair by President Bush and it's been very political. The
Democrats have been willing to talk to the car companies; the Republicans haven't. And that's what
you're really seeing play out.

RICHARD LINDELL: I guess the President is able to do this because it looks like outside of Michigan
you've failed to bring the rest of the US public along with you, haven't you?

DICK BLOUSE: It's been very interesting. We have our Chamber of Commerce is conducting a national
Coalition and actually there are 36 Chambers of Commerce in other parts of the United States that
are supporting these efforts the same as we are. So what I think you're reading is a lot of bad
press.

And it's unfortunate but most of the nation truly doesn't understand the impact of the automobile
industry throughout their economy. It will impact the economy of virtually every state in this
nation.

RICHARD LINDELL: Because the polls are showing that most Americans, most voters, do not want the US
Government to be bailing out the car makers.

DICK BLOUSE: You know what, they felt the same way about the US Government bailing out the
financial institutions but the politicians still did that. I honestly don't understand how they
dealt with the financial institutions but they won't deal with manufacturing which is absolutely
essential to this country that we do protect our manufacturing base.

ELEANOR HALL: That's the president of the Detroit Regional Chamber, Dick Blouse, speaking to
Richard Lindell.