The $17.4 billion rescue package for the auto industry was welcome news to Marylanders who make, sell and ship Chrysler and General Motors cars. They hailed it as a necessary step to putting the battered companies back on track and luring consumers back to showroom floors.
"I'm ecstatic," said John Miller, owner of Miller Bros. Chevrolet and Cadillac in Ellicott City. "I think it'll promote some consumer confidence in our product. We've got phenomenal products, and there are a lot of people sitting on the sidelines."
Miller said the short-term loans announced Friday by President George W. Bush appear to be "a good first step" in addressing GM's financial woes. The money is meant to keep the companies afloat as they overhaul their businesses and try to claw their way back to profitability.
Doug Hanscom, a Dundalk resident who works at the GM assembly plant in Newport, Del., got the word in the factory's break room. "We all had a big sigh of relief," he said. "Not knowing is almost as bad as the rumors we've been hearing."
But Hanscom, a 32-year veteran, worries about a possibly steep pay cut. Bush said that by the end of next year, wages and benefits of United Auto Workers union members should be brought in line with those of nonunion American employees at foreign automakers such as Toyota.
"I'd like to read the fine print," Hanscom said. "What do we have to give up compared to what the CEOs have to give up - or management, period?"
If a wage cut is inevitable, Hanscom said, UAW workers should have a multiyear transition to cushion the blow. A union worker with 30 years of seniority makes over $58,000 a year. Hanscom also thinks pensions should remain unchanged.
After weeks of uncertainty, punctuated by last week's demise of a rescue package in the Senate, the announcement has eased fears that GM or Chrysler would soon seek bankruptcy protection.
"It's a little bit of peace of mind that at least we have a few more months," said Jim Wiedermann, terminal manager at ATC Amports, a major auto processor at the port of Baltimore.
Amports employs about 400 people at the port, half of them tied to the export of Chrysler vehicles. The firm moves 350,000 cars and trucks a year through the port, mostly Chryslers.
"Hundreds of people just in Baltimore rely on these vehicles coming in and being exported all over the world," Wiedermann said.
The worsening recession has prompted production cutbacks, and Chrysler recently announced a monthlong pause at its 30 plants in North America. Still, Wiedermann said, now "there may be some light at the end of the tunnel."
In Washington, Sen. Benjamin L. Cardin issued a statement praising Bush for "finally" acting to prevent the collapse of what he called a critical industry.
"This funding is a lifeline that gives the auto companies the breathing room they need as they weather the credit crisis and work to restructure their operations," said Cardin, a Democrat.
Rep. Elijah E. Cummings said the loans were "responsible" given the "strict terms and conditions to ensure that taxpayer dollars are not wasted through reckless spending." The Maryland Democrat said they should be a model for any future federal aid: "We cannot have one standard for white-collar and another for blue-collar."
For area car dealers, the iffy status of GM and Chrysler has compounded the effects of the credit crunch and economic slowdown. People are less likely to buy cars from a company that might go bankrupt, said Peter Kitzmiller, president of the Maryland Automobile Dealers Association.
This year 14 dealerships have closed in Maryland, including Towson Ford and Dulaney Lincoln Mercury. Statewide, the association represents 340 new-car and truck dealers with 26,000 employees.
"The dealers know this is sort of a 'live to fight another day' kind of situation," Kitzmiller said, adding that no loan money will flow to dealerships.
"This is something to keep our manufacturers going. We have our own issues, namely, we need to start selling vehicles."