Big Three 'pleased' after Bush meeting but ...

Detroit execs emerge praising dialogue but with no hard promises from the Bush administration.

By Chris Isidore, CNNMoney.com senior writer

NEW YORK (CNNMoney.com) -- Top executives from General Motors, Ford and Chrysler got their meeting with President Bush Tuesday, and while they left saying they were pleased by the talks, they also left without any firm pledges of help from the administration.

Still, in comments outside the White House after the afternoon meeting in the Oval Office, the executives said there was progress - and promises of more dialogue and negotiations ahead.

auto_ceos.gi.03.jpg
Tom LaSorda, left, CEO of Daimler Chrysler AG's Chrysler Group, Rick Wagoner, center, CEO of General Motors Corp., and Alan Mulally, right, CEO of Ford, speak with press outside the White House in Washington Tuesday.
More on politics of autos

GM (Charts) CEO Rick Wagoner said a couple of times that the executives and the president were not in agreement.

There were "some areas where, frankly, we might see it differently - exchange rate policy in particular," he said. But still he and the other executives said they felt Bush was supportive of their overall goals.

"He didn't make any promises other than making sure that the playing field is even on both sides," said Tom LaSorda, the head of Chrysler Group, the North American unit of DaimlerChrysler (Charts), speaking about the president's upcoming trip to an Asia-U.S. trade summit later this week. "It was a tremendous dialogue with the president this time."

The auto executives stressed that despite huge losses, their companies were not looking for loan guarantees or a federal bailout. But they did want help on health care policy, energy and other areas that could be costly for the federal government.

President Bush said the meeting had been a "fascinating discussion," and praised the automakers' efforts to make cars that use alternative fuels, which he said was in the country's "economic interests as well as in our national security interests." He also praised the efforts the executives were taking to stem losses at their U.S. factories.

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

Ford (Charts) CEO Alan Mulally said the executives were pleased about the president's comments that he was looking to work with the Democrats on a wide range of issues important to the auto industry.

"The president clearly understands the importance of the auto industry to the United States and global economy," said Mulally. "We covered a lot in a little over an hour."

Auto analyst Kevin Tynan of Argus Research said it was a plus the executives met with Bush, and that their chances of advancing their legislative and policy agenda has improved after the Democrats took control of the House and Senate in last week's mid-term elections.

But Tyson said he didn't think the industry could count on legislative advances to solve its competitive problems, which has left U.S. automakers with significantly higher health care and retiree benefit costs than their Japanese competitors.

"It's a better landscape for them to get something done, but at this point that's still theoretical," said Tynan. "Sure, it could help to the tune of hundreds of millions or even billions of dollars of savings. But they don't have the luxury to wait to see if that's going to happen. At this point I wouldn't be counting on any of it."

Wagoner dodged a reporter's question about how the Democrats taking control of Congress might help them with the automakers with their policy agenda. "We can probably tell you a little more in about six months," he said.

David Cole, chairman of the Center for Automotive Research, said he was encouraged by the meeting and the discussions.

"I think it went reasonably well. I think they're talking about the right things," he said. "It's a work in progress. I'm less pessimistic. Once you open a construction dialogue like this, you'll have a better chance to do something positive."

The meeting drew a comment from one of the Democrats seen as a potential presidential candidate in 2008 - Sen. Hillary Clinton, who was very active on health care reform when she was First Lady.

"I hope that this meeting marks the beginning of a renewed commitment to a public-private partnership in which government and industry work together to address the challenges that are so important to both the American economy and American workers," she said in a letter she sent to Bush, which was released just before the meeting.

"Clearly, the growing cost of health care and pensions for retirees and workers is one of the most significant challenges facing the domestic auto industry today," she added. "But as we work to address this problem, any solution must not become a zero-sum game in which wages and benefits to workers are slashed to the bone in order to keep competitive."

Health care a key issue

Health care costs are one area where the automakers say they can't compete with overseas automakers, who have much of their employees' medical costs covered by their governments. By comparison, the Big Three expect to pay more than $12 billion this year to cover medical expenses of more than 2 million employees, retirees and their dependents.

Wagoner said that the executives talked to Bush about the so-called catastrophic medical cases that account for a significant percentage of medical costs overall. He gave no details about solutions they proposed, but told reporters, "I can't say 100 percent that (Bush) saw it exactly our way, but he said he'd be very willing to look into that.

"We're going to talk about ways together on how can we team up and go after and try to address some of the core issues, like high-cost cases," Wagoner added. "The federal government has it, every business has it. How can we work together, create more dialogue?"

Wagoner said the meeting did not touch on details of some of the key energy goals of the automakers, including greater availability of ethanol-based fuel that can be used in about 7 million GM, Ford and Chrysler vehicles already on the road.

Less than 1,000 stations now offer the 85-percent ethanol blend fuel known as E85. The Japanese and European automakers have not made a commitment to "flex-fuel" vehicles that can run on regular gasoline or E85.

"Obviously we have some challenges to get the production levels up and, you know, get some breakthroughs," said LaSorda. "But the impression that I had is that he's well informed and sees a good opportunity there."

The three executives were looking for help on currency exchange rates with Japan, since they say the dollar's strength against the yen gives Japanese automakers such as Toyota Motor (Charts), Honda Motor (Charts) and Nissan Motors (Charts) additional profits on vehicles they export to the United States.

Ford's student driver takes the wheel

Wages are rising. Here's what to watch

Democrats may put Big Three in driver's seat

Auto stocks Top of page

YOUR E-MAIL ALERTS
Follow the news that matters to you. Create your own alert to be notified on topics you're interested in.

Or, visit Popular Alerts for suggestions.
Manage alerts | What is this?
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.