Bush, automakers talk health care, trade

[Ron Burgundy]

AP - Detroit's auto industry leaders said they had a productive meeting with President Bush on health care, trade and energy. Time will tell whether the gathering helps the U.S. automakers struggling against foreign competitors.

Bush assured leaders of General Motors Corp., Ford Motor Co. and DaimlerChrysler AG's Chrysler Group on Tuesday that he understood they were making "tough choices" to strengthen their companies against stiff competition. He promised continuing dialogue as they seek help on trade and health care issues.

"It's in our interest that in government we find out ways that we'll be able to work to make sure that this industry is as vibrant and solid as possible," Bush said.

Bush, Vice President Dick Cheney and other administration officials met in the Oval Office for just over an hour with the auto executives, who told reporters that it was productive and that they hoped it would lead to future discussions.

"The president clearly understands the importance of the business to the United States and the global economy," Ford Motor Co. Chief Executive Alan Mulally said.

The auto executives said they pressed Bush about their concerns on health care, energy and trade issues, while making clear that the troubled industry does not want a federal bailout. The meeting had been delayed since last spring and had been widely anticipated in the auto industry.

Bush met with the leaders just hours before traveling to Asia to meet in Vietnam with Asia-Pacific economic partners. He said he would tell those partners, "Just treat us like we treat you. ... Our markets are open for your products and we expect your markets to be open for ours, including our automobiles."

He said of the U.S. executives, "These leaders are making difficult decisions, tough choices to make sure that their companies are competitive in a global economy. And I'm confident that they're making the right decisions."

General Motors and Ford are both undergoing significant turnaround plans after posting large losses last year. GM has persuaded about 35,000 hourly workers to leave the company under early retirement or buyout plans, while Ford has offered buyouts and early retirement packages to all 75,000 U.S. production workers in hopes of reducing its hourly work force by up to 30,000.

The companies have faced hardships while Japan-based Toyota Motor Corp. is enjoying soaring profits and outlining plans to unseat GM as the world's largest automaker.

GM Chairman-CEO Rick Wagoner said the automakers made the case that Japan's weakened yen makes imported goods from Japan cheaper and enhances profits Japanese automakers make in the U.S. He said they discussed the automakers' "strong conviction that the Japanese yen is systematically undervalued, which helps them to maintain significant trade balance surpluses in our industry."

"I can't honestly say it appears the president 100 percent saw it that way, but we had a good dialogue," Wagoner said. The automakers said the weak yen provides Japanese automakers with a $3,000 to $9,000 per vehicle cost subsidy.

Tom LaSorda, president and chief executive officer of DaimlerChrysler AG's Chrysler Group, said the automakers stressed to Bush that "specific issues like health care" aren't limited to the automobile industry.

All three automakers spend more on health care per vehicle than steel, which adds about $1,000 to the cost of a car built by the manufacturers. GM, the nation's largest private provider of health care, spent $5.3 billion on health care last year for 1.1 million people.

On Capitol Hill, lawmakers representing large numbers of auto workers said they hoped Congress would address reducing the cost of the health care on manufacturers, foster the research and development of alternative fuel vehicles and promote fair trade practices. Some lawmakers, like Sen. Barack Obama, D-Ill., have urged incentives for the industry to build more fuel-efficient vehicles.

"There is no 'silver bullet' answer to the challenges facing the auto industry, but there are things the government can do to ease the pain and facilitate solutions," said Rep. Joe Knollenberg, R-Mich.

Sen. Debbie Stabenow (news, bio, voting record), D-Mich., who criticized Bush during her re-election campaign for not meeting with the executives earlier, said she hoped the meeting would be "an important first step toward a comprehensive American manufacturing strategy."

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On the Net:

General Motors Corp.: GM Cars - General Motors Corporate Website - GM Customer Service

Ford Motor Co.: http://www.ford.com

Chrysler Group: Chrysler - Cars - Minivans - SUVs