Locally, the outlook for the auto industry is bleak. Not only are the large automakers in trouble, but their trouble is being passed onto other companies.
The mood was quite different in Greensburg, Indiana, just southeast of Indianapolis, where a new auto plant brings hope to the Midwest as Honda opened its new facility in there.
"From my heart, I want to say congratulations," said Takeo Fukui, Honda President & CEO.
One thousand workers welcome Honda, and the company is expected to hire another 900 people. Honda came to Indiana for its location and generous incentives. It's reported Indiana offered Honda $141 million in tax credit and abatements, training assistance and infrastructure upgrades.
"To make sure what is happening here in Greensburg happens again and again and again," said Governor Mitch Daniels, Indiana.
Across the Illinois border, there's no applause here. On the Far South Side of Chicago, a corridor of companies around the Ford assembly plant opened to help production at Ford.
In recent months, there's been less demand and less work.
JCIM makes plastic pieces for the inside of Ford cars. It laid off 100 people. TDS - now Syncreon - will close next week, laying off 70 people who do pre-assembly work. Brose assembles Ford Taurus doors. It's expected to close in the spring, putting 50 employees out of work.
"There are really no jobs out there. Where is that going to take us? And me being a single mom and having kids at home to take care of, where is that going to take me?" said Sylvia Coleman, Brose employee.
Roosevelt Williams represents many of the workers. He said he'd like the government to help offset health insurance costs for American automakers.
"We need some type of universal health care. And maybe they can compete then," said Williams, United Auto Workers Local 3212.
The nearby layoffs come as Ford cuts back. Nearly 800 people were laid off earlier this month.
"You don't know what's going to go on with the industry, but like I said, it just doesn't seem fair what they do for the import they don't do for the domestic car companies," said Frank Kubisz, Ford employee.
It's estimated that 12 companies opened to work on Ford cars. The UAW local president says by the end of next year, eight of those companies will be gone taking away 1,000 jobs.
"Our industry ... needs a bridge to span the financial chasm that has opened up before us," General Motors CEO Rick Wagoner told the Senate Banking Committee in prepared testimony. He blamed the industry's predicament not on failures by management but on the deepening global financial crisis.
And Robert Nardelli, CEO of Chrysler LLC, told the panel in his prepared remarks: "The crippling of the industry would have severe and debilitating ramifications for the industrial base of the United States, would undermine our nation's ability to respond to military challenges and would threaten our national security."
But the new rescue plan appeared stalled on Capitol Hill, opposed by Republicans and the Bush administration who don't want to dip into the Treasury Department's $700 billion financial bailout program to come up with the $25 billion in loans.
Sympathy for he industry was sparse.
Banking Committee Chairman Christopher Dodd, D-Conn., told the leaders of GM, Chrysler and Ford that the industry was "seeking treatment for wounds that were largely self-inflicted."
Still, he said, "Hundreds of thousands would lose their jobs" if the companies were allowed to collapse.
Sen. Mike Enzi, R-Wyo., complained that the larger financial crisis "is not the only reason why the domestic auto industry is in trouble."
He cited "inefficient production" and "costly labor agreements" that put the U.S. automakers at a disadvantage with foreign companies.
Wagoner said that despite some public perceptions that General Motors was not keeping pace with the times and technological changes, "We've moved aggressively in recent years to position GM for long-term success. And we were well on the road to turning our North American business around."
"What exposes us to failure now is the global financial crisis, which has severely restricted credit availability and reduced industry sales to the lowest per-capita level since World War II."
Failure of the auto industry "would be catastrophic," he said, resulting in three million jobs lost within the first year and "economic devastation (that) would far exceed the government support that our industry needs to weather the current crisis."
Chrysler's Nardelli also blamed the industry's predicament on the overall financial panic. And he sought to respond to critics who suggest the automakers seek Chapter 11 bankruptcy protection, as have some airlines that later emerged restructured and leaner. "We cannot be confident that we will be able to successfully emerge from bankruptcy," Nardelli said.
Chrysler was bailed out by the federal government once before, in 1979, with loan guarantees. The company repaid the loan, plus interest, ahead of schedule.
Congressional leaders worked behind the scenes in an effort to hammer out a compromise that could speed some aid to the automakers before year's end. But the outlook seemed poor.
"My sense is that nothing's going to happen this week," Sen. Bob Corker, R-Tenn., said at the opening of the hearing.
Earlier, Majority Leader Steny Hoyer said Congress might have to return in December -- rather than adjourning for the year this week, as expected -- to push through an auto bailout.
"Dealing with the automobile crisis is a pressing need. We are talking about a lot of people ... and a great consequence to our economy," said Hoyer, D-Md.
The financial situation for the automakers grows more precarious by the day. Cash-strapped GM said it will delay reimbursing its dealers for rebates and other sales incentives and could run out of cash by year's end without government aid.
In the Senate, Democrats discussed but rejected the option favored by the White House and GOP lawmakers to let the auto industry use a $25 billion loan program created by Congress in September -- designed to help the companies develop more fuel-efficient vehicles -- to tide them over financially until President-elect Barack Obama takes office.
House Speaker Nancy Pelosi, D-Calif., and other senior Democrats, who count environmental groups among their strongest supporters, have vehemently opposed that approach because it would divert federal money that was supposed to go toward the development of vehicles that use less gasoline.
Instead, they want to draw the $25 billion directly from the $700 billion Wall Street bailout -- bringing the government's total aid to the car companies to $50 billion.
A Senate vote on that plan, which would also extend jobless benefits, could come as early as Thursday, but aides in both parties and lobbyists tracking the effort privately acknowledge it doesn't have the support to advance. Treasury Secretary Henry Paulson renewed the administration's opposition on Tuesday.
Even the car companies' strongest supporters conceded Tuesday that changing the terms of the fuel-efficiency loan program might be the only way to secure funding for them with Congress set to depart for the year and the firms in tough financial shape.
"While I believe we have to have retooling going into next year, if in the short run the only way we have to be able to get some immediate help is to take a portion of that, I would very reluctantly do that -- but only because I believe President-elect Obama is going to be focused on retooling and on a manufacturing strategy next year," said Sen. Debbie Stabenow, D-Mich.
The White House said the government shouldn't send any more money to the struggling auto industry on top of the already-approved loans.
"We don't think that taxpayers should be asked to throw money at a company that can't prove that it has a long-term path for success," said White House Press Secretary Dana Perino.
Sen. Mitch McConnell, R-Ky., the minority leader, said that redirecting the existing loans was "a sound way to go forward," and that he was working with Democratic Leader Harry Reid of Nevada to set a vote on such a plan.
"The auto industry obviously is very important, very important to my state, but there is a way to do this," said McConnell, who has two Ford plants and a GM plant in his state.
Paulson, testifying on the House side, defended the administration's handling of the massive $700 billion bailout for the financial industry and said it should remain off-limits for Detroit, no matter how badly the automakers need help.
"There are other ways" to help them, he said.
The Associated Press contributed to this report.
