Nov. 18 (Bloomberg) -- The U.S. economy would suffer a ``catastrophic collapse'' if domestic carmakers fail, General Motors Corp. Chief Executive Rick Wagoner said, as the nation's auto industry renewed appeals to Congress for federal aid.
Three million jobs would be lost within the first year, personal income would drop by $150 billion and government tax losses would total $156 billion over three years, Wagoner told a Senate panel.
``Such a level of economic devastation would far exceed the government support that our industry needs,'' he said. ``This is about much more than just Detroit. It's about saving the U.S. economy from a catastrophic collapse.''
The Big Three chief executives, Wagoner, Alan Mulally of Ford Motor Co. and Robert Nardelli of Chrysler LLC, testified today at a hearing called by Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat. The companies are seeking $25 billion in loans to keep them operating.
Congressional Democrats propose tapping the recently enacted $700 billion financial-rescue package for the aid. President George W. Bush and Senate Republicans said they oppose that approach and instead prefer using $25 billion that was earlier approved by Congress to retool auto plants.
Senate Majority Leader Harry Reid said he didn't think the idea of using the earlier-approved Energy Department loans for the aid would be ``going very far in our caucus.'' The impasse dimmed prospects for aid approval during this week's lame duck session of Congress. House Speaker Nancy Pelosi said she won't call Congress into session next month even if lawmakers fail to enact automaker aid.
``A decision to make government assistance available makes much more sense than taking the tremendous risk to our already- fragile economy that comes with inaction,'' Mulally testified.
Nardelli said, ``Without immediate bridge financing support, Chrysler's liquidity could fall below the level necessary to...