The chairmen and CEOs of General Motors, Ford and Chrysler will testify to the Senate Banking, Housing and Urban Affairs Committee as Democrats mount a long-odds bid to pass a 25-billion-dollar rescue package.
Their testimony, to be followed by an appearance before a House of Representatives panel Wednesday, comes with millions of jobs threatened as the industry's crippling losses are exacerbated by the deepening economic crisis .
Ford CEO Alan Mulally, Chrysler boss Robert Nardelli and Richard Wagoner of General Motors will testify to the committee, under the chairmanship of Democrat Chris Dodd who has already cast doubt a bailout can pass this week.
On Monday, Democratic Senate leaders in Congress opened a "lame duck" session vowing to fight for a new loan program for the auto industry.
Senior party members condemned the reluctance of the White House and Republican leaders to siphon off the money from a 700-billion-dollar finance industry bailout which has already been approved.
Senate Majority leader Harry Reid hit out at Treasury Secretary Henry Paulson for refusing to adapt the huge bailout to aid the auto industry, saying: "All it would take is one stroke of a pen and that problem would be solved.
"We are seeing a potential meltdown in the auto industry, with consequences that could directly impact millions of American workers and cause further devastation to our economy."
On Monday, Senators Reid and Robert Byrd unveiled their 100-billion-dollar economic recovery package that includes the 25 billion dollars for the auto industry, sourced from the 700-billion-dollar bailout.
The Reid/Byrd Economic Recovery Act of 2008 "requires a long-term financial plan from the companies and has robust provisions for oversight, taxpayer protection, and executive compensation," a Democratic Party statement said.
But the White House got in a preemptive strike before lawmakers reported for work, saying the special rescue funds for banks were not the answer, calling on Congress to adapt an existing 25-billion-dollar auto industry loan program.
"The administration does not want US automakers to fail, and in fact we support assistance to automakers," Bush's press secretary Dana Perino said.
But "we believe this assistance should come from the program created by Congress that was specifically designed to assist the automakers -- from the 25-billion-dollar Department of Energy loan program," she added.
"This is the appropriate funding to use for automakers rather than seeking an additional 25 billion dollars from the TARP program" -- the Troubled Asset Relief Program, as the bailout is known.
Democratic leaders would need at least 10 Republican votes to pass the bailout in the Senate and overcome the minority's obstruction tactics with a 60-seat filibuster-proof majority.
Perino pointed out that any attempt to reopen the TARP program would not make it through the Senate, and said the White House was working with Senate Republican minority leader Mitch McConnell on the issue.
Underscoring Detroit's desperation, Ford announced Tuesday it would sell a 20-percent stake in its Japanese partner Mazda Motor Corp to raise 540 million dollars in much-needed cash.
"This agreement allows Ford to raise capital that will help fund our product-led transformation, and at the same time, allows Ford and Mazda to continue our successful strategic relationship in the best interest of both companies," Ford's Mulally said.
Automakers have warned that millions of jobs depend on quick federal aid to the manufacturers of iconic brands including Buick, Cadillac, Chevrolet and Jeep, and have taken out web and newspaper ads warning of the dire consequences of the industry's demise.
Wagoner has warned GM needs an infusion of cash in the coming weeks to prevent a devastating bankruptcy at the nation's largest automaker and cannot wait until president-elect Barack Obama -- who has promised to bail out the sector -- is sworn in on January 20.
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