Panel II of a Hearing of the House Financial Services Committee - Auto Industry Stabilization Plans

Panel II of a Hearing of the House Financial Services Committee - Auto Industry Stabilization Plans

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REP. BILL FOSTER (D-IL): One number that I'd be -- I think is absolutely crucial and I'd like to see developed by a trusted third party is the total value of GM's unencumbered assets and, that could be used as collateral either for financing or for some sort of pre- bankruptcy financing. And to compare that to the capital injection you're going to need to, for a return to viability. And that's the fundamental number that I think, you know, this whole discussion depends on. And I'd be interested in knowing who it is that we could trust to develop this number.

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REP. FOSTER: Well it seems to me that the long-term issue that we're dancing around is that the problem here is declining market share. And the reason for that is it is fundamentally less expensive to produce cars and components in developing nations.

You can get a good engineer for $10,000 a year in India and $2 a day factory labor in China. And they can be trained to do a decent job of assembling quality cars. And the only way to preserve the car industry long-term, is to acknowledge that we have a national security interest in preserving a self-sufficient automobile industry and that nothing short of some combination of tariffs, non-tariff barriers, you know, subsidies or repeated capital injections -- which is sort of what we're doing here -- and nothing short of that sort of thing is actually going to do the trick to make a long-term, stable automobile industry here. And I think that, you know, that sometimes gets called a national auto policy but it is pretty much what it comes down to.

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