Detroit automakers are in Washington again to plead their case for a $34 billion dollar federal loan.
Senate Banking Chairman Chris Dodd invited the President of the Connecticut Automotive Retailers Association to testify on how the bailout will also help local businesses
James Fleming opened his statement before the Banking Committee with a story about how a local dealer couldn't sell cars to 30 different customers last month because financing wasn't available. Fleming says this lack of credit impacts everyone from employees to state governments.
"Everyone of the Senators here if you go back and talk to your state budget office that are trying to deal with deficit situations will find out what a big part of automobile sales represent in that budget. In Connecticut, it represents a loss of $65 million dollars in our budget just in new car sales tax."
Fleming says if Chrysler, Ford, and General Motors don't get the bailout, the impact will be felt far beyond Detroit
"If you do nothing which is essentially no and allow bankruptcy to occur, the impact on the dealers and the people that they employ in your home state will be dramatic. People will not buy cars from a bankrupt entity. They are afraid to buy cars as it is right now."
Senator Dodd says he supports a federal loan package for the automakers saying if the loans are necessary to avoid thousands of layoffs in an already fragile economy. However, even if the money is approved, Moody's Chief Economist, Mark Zandi warned the Banking Committee that $34 billion dollars isn't enough for the companies to avoid bankruptcy.
Congress may consider a vote on the auto loans as early as next week.