WASHINGTON - Embattled U.S. automakers added a new entry to their list of troubles yesterday: executive jet travel.
For a second consecutive day, the chief executives of Detroit's Big Three tried to persuade a skeptical Congress that they deserve $25 billion in emergency loans. But that message was drowned out by discussion of their corporate flying habits, and the Senate later scrapped plans for a vote on the loans today - dimming hopes for a rescue plan this year.
The executives from General Motors, Ford and Chrysler insisted they had gotten serious about producing smaller, fuel-efficient vehicles. They also told how they had trimmed corporate fat and renegotiated generous union contracts so they could better compete with foreign automakers.
But under scornful questioning by members of the House Financial Services Committee, the CEOs admitted that when they came to Washington to plead for government aid, each of them traveled on a private plane.
"There's a delicious irony in seeing private luxury jets flying in to Washington, D.C., and people coming off of them with tin cups in their hands saying that they're going to be trimming down and streamlining their businesses," said Rep. Gary L. Ackerman, a New York Democrat. "There's a message there."
"I mean, couldn't you all have downgraded to first class or jet-pooled or something to get here? It could have at least sent a message that you do get it."
All three companies said they require their chief executives to fly on private planes for security reasons.
The criticism from Ackerman and other lawmakers - who travel back to their districts on commercial airlines - highlighted why the auto executives' request for emergency money remains stuck on the runway. Many members of Congress worry that Detroit has not changed its big-spending, gas-guzzling habits and that company executives will be back in a few months asking for billions of dollars more to stay afloat.
"My fear is you're going to take this money and continue the same stupid decisions you've made for 25 years," said Rep. Michael E. Capuano, a Massachusetts Democrat who noted that the U.S. automakers fought him and other lawmakers for years over tougher fuel-efficiency rules that finally passed in 2007.
The dust-up over corporate luxury came as prospects for a speedy Senate vote on the bailout measure appeared to dim.
Last night, Senate Majority Leader Harry Reid, a Nevada Democrat, canceled plans to vote on a bailout bill. Although the loans still could be added this week to legislation to extend unemployment benefits, the cancellation probably ends any chance for automaker aid until President-elect Barack Obama takes office in late January with larger Democratic majorities.
The chief executives - GM's Richard Wagoner, Ford's Alan Mulally and Chrysler's Robert Nardelli - said they had renegotiated their union contracts, started producing more fuel-efficient and alternative-energy vehicles and were on the road to success until the financial crisis hit.
Without emergency loans, they said, the companies could be forced into bankruptcy, causing as many as 3 million workers with ties to the industry to lose their jobs.
"Helping the auto industry bridge the current financial crisis will not only prevent massive economic dislocation now, it will produce enormous benefits for our country later," Mulally said.
Financial Services Committee Chairman Barney Frank, a Massachusetts Democrat, has proposed extending $25 billion in loans from the $700 billion rescue fund. The loans would be repaid with interest and come with stock options, limitations on executive compensation and oversight by a government board that could veto any company expenditures of more than $25 million.