WASHINGTON -- Detroit's automakers failed to close their most important sale yesterday, as Congress kicked back their urgent pitch for a $25 billion rescue, criticizing executives for not convincing lawmakers and the American public that the industry knew how to fix itself.
Democratic leaders demanded that automakers submit plans by Dec. 2 for how the loans might be used to transform them into viable companies, promising to bring Congress back into session Dec. 8 if the plans measure up -- a dangerously short time frame for two automakers who may run out of cash before paying bills in January.
But lawmakers also warned Detroit that the auto executives had damaged their cause during hearings this week, from balking at providing too many details to not taking responsibility for their mistakes and asking for government money while flying to Washington in corporate jets.
"The auto companies have not been able to convince Congress or the American people that this government bailout will be their last," said Senate Majority Leader Harry Reid, D-Nev. Added House Speaker Nancy Pelosi, D-Calif.: "Until automakers show us the plan, we cannot show them the money."
Detroit's automakers quickly agreed to provide as much information in a plan for survival as Democratic leaders wanted, provided there are some guidelines on confidential details. But it is unclear what criteria Congress will use to judge the plans.
"We will be glad to do that," General Motors Corp. Chairman and Chief Executive Officer Rick Wagoner said in an interview yesterday. "We obviously have such a plan and have over recent times had a chance to share them."
Ford said it "welcomes the opportunity to provide our plan to Congress." Chrysler said it is prepared to meet the "accountability and viability" criteria set by congressional leaders.
The move by Mr. Reid and Ms. Pelosi short-circuited a bipartisan compromise driven by Michigan's two senators that they said could have passed the Senate yesterday. But Democratic leaders said no bill could pass either chamber without more explanations from the industry.
The deal by Michigan Sens. Carl Levin and Debbie Stabenow, both Democrats, along with Sen. Christopher Bond, R-Mo., and others, would use the $25 billion set aside by Congress in September for retooling auto plants over the next several years and lend it to automakers immediately.
Mr. Levin said that while the delay was risky to the industry, the leaders had taken it upon themselves to aid automakers, and that the compromise deal reached yesterday would likely be the starting point for Congress' debate in December.
"I'm encouraged the leaders are now taking this issue on, and they're committed ... to making sure this industry survives," Mr. Levin said. "Now, this is right smack in Congress' lap."
The leaders' decision ended a historic week for Detroit's automakers and the UAW, who are suffering from the worst economic conditions in decades and rapidly running out of cash. GM and Chrysler LLC both have warned of imminent collapse without government help, while Ford Motor Co. has said it could be toppled by a breakdown at a competitor.
Despite hours of questioning Tuesday and Wednesday, and a constant drumbeat of as many as 3 million lost jobs if the industry should collapse, automakers appeared to have lost as many votes as they won, if not more.
Mr. Reid twice yesterday cited the decision by the chief executives to fly corporate jets to their hearing, and emphasized that he favored a bailout to save autoworkers' jobs.
Other senators questioned whether the industry needed three automakers, and whether bankruptcy wasn't still an option. Auto executives maintain that any bankruptcy would inevitably lead to dissolving the firm and thousands of lost jobs.
"I was really struck by the lack of coherence," said Sen. Bob Corker, R-Tenn. "I was in some ways embarrassed for them. They had no plan."
"There was a failure to appreciate that there was no likelihood of them getting a check for $25 billion, no questions asked," said Senate Banking Committee Chairman Chris Dodd, D-Conn., who along with House Financial Services Committee Chairman Barney Frank, D-Mass., will review the industry's submissions. "There's a clear need for a much more concrete vision and plan for this industry and how it's going to survive."
The decision to put the industry's future under a microscope raises the question of how willing Congress will be to second-guess the business judgments of Detroit automakers. Mr. Frank said meeting fuel-economy targets would have to be a central part of any outlook, but such technologies often cost money to put into place.
Take the Chevrolet Volt. GM has preserved the extended-range electric vehicle from its other cuts in vehicle development, saying the Volt was too important to delay from its 2010 target. Yet GM also has suggested that the Volt would be sold at a loss for some time, and that the losses were acceptable to establish GM as a technological leader.