Autoworkers cautiously optimistic after rescue

On the morning that President George W. Bush announced a rescue for the U.S. auto industry, Robert Barber stopped by his local union hall in Kokomo, Ind., to ask where to file an unemployment claim.

Barber, 47, has worked for 14 years at the Chrysler transmission factory in Kokomo, where production temporarily shut down last week. He, like many autoworkers, had been confident the U.S. government would come through for the automakers, though he wonders what took so long.

"My personal thing is, I think they're being a little harder on us because of what the banks did with the bailout money," Barber said.

Autoworkers and car dealers around the country expressed cautious relief Friday after the Bush administration threw a lifeline to General Motors Corp. and Chrysler LLC. They were encouraged that the U.S. auto industry would live on - at least for a few more months. But many remained uncertain that their jobs were safe, and some workers were dismayed by the sacrifices they're being asked to make.

"I think it will be just enough to help us hold on," said Clayton Akers, who works at Chrysler's Jeep Liberty and Dodge Nitro factory in Toledo, Ohio.

Bush outlined a plan for $17.4 billion in rescue loans in exchange for tough concessions from the troubled companies and their workers. Executives must accept limits on executive pay and perks, while workers are being called on to bring their pay and work rules in line with those at foreign automakers' U.S. plants.

At the four Serpentini Chevrolet dealerships in the Cleveland area, the sales staff was excited and relieved to hear the White House announcement, said Bob Serpentini, whose patriotic pitches to buy American cars are a staple on local TV

"We appreciate the opportunity to get ourselves in a position to be more than competitive with the imports and get ourselves fixed," Serpentini said.

He said the White House plan would make customers comfortable that their new vehicles would have reliable service and warranties. His newest pitch to buyers: "At the end of the day, the American people have an investment in our company."

On the other side of Ohio, Mary Kay Zappia, owner of Salem Chrysler-Jeep in Dayton, was similarly upbeat. She said allowing the automakers to fail would have been "catastrophic," and she agreed that tough concessions would need to come from Chrysler and GM.

"They have to have a viable plan," she said. "It can't be some Micky Mouse fluffy stuff. It has to be down to the bare bones."

She said the plan will probably boost her flagging sales, "but it will take a while."

Whether the quick fix promised by the Bush administration will be enough to salvage the carmakers remains an unanswered question. Bailout or no, the auto industry remains mired in the worst sales slump in 26 years.

In November, U.S. vehicle sales plunged 37 percent from last year as some customers continued to have trouble getting credit to finance cars and the troubled economy kept many away from dealerships altogether. GM and Chrysler were among the hardest hit, with their year-over-year sales falling more than 40 percent.

Workers at the automakers' dozens of factories have already borne the brunt of the car market downturn, the victims of layoffs, production cuts and plant closures over the years.

At United Auto Workers Local 685 in Kokomo, where Barber, the Chrysler transmission employee, asked about unemployment benefits, a sign in red and white hanging outside says, "NO Non-union Made Vehicles Allowed on Union Property. Towing At Owner's Expense." Workers and retirees inside played pool and ate Christmas cookies.

Terry McKay, 44, who has worked at the transmission plant for more than 12 years, had some kind words for Bush after hearing the bailout news.

"We have to keep our manufacturing base intact, and he knows it," McKay said. "I really like the way he went against his own party, too."

But McKay said he'll be worried until workers know more about what automakers plan to do with the money.

"We want to know as much as Congress what they're going to do with this money, how they're going to implement changes to keep us competitive," he said. "They've kind of mismanaged money in the past. Hopefully they don't do it again."

At GM's parts plant in Parma near Cleveland, Brian Thorne, 37, said he was pleased to hear that financial aid could be coming from Washington.

"People in the plant will be more motivated," said Thorne, a 12-year employee who works as an electrician. "It's a relief. We've gotten some layoffs, but it's not a surprise. In this industry, you have to expect that.

Jim Graham, president of the UAW Local 1112, which represents workers at GM's Lordstown assembly plant, was displeased that it took the government so long to step in, but said it finally resonated with Washington that "people do not buy cars from bankrupt companies."

Lordstown's 3,400 assembly workers and 1,700 fabricating plant workers will go on an extended shutdown starting Christmas Eve. When they return Feb. 2, they'll be short 2,000 workers due to layoffs. Graham hopes the loans came in time. He expressed no sense of relief.

"I feel a sense of disillusionment," he said. I'm disillusioned with our federal government."

The rescue calls for the GM and Chrysler to restructure their companies and return to "viability" by March 31, or else the government will call in the loans.

Barber said he hopes the companies pull it off.

"That three months," he said. "That's a short turnaround period."

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Associated Press Writers John Seewer in Toledo; Tom Murphy in Indianapolis; Tom Krisher in Detroit; Jim Hannah in Dayton; and Thomas J. Sheeran, Joe Milicia and M.R. Kropko in Cleveland contributed to this report.