The Big Three, who can now almost always be referred to as the Detroit 3, as their sales no longer fit the “Big” criteria are lobbying congressional leaders for help.

The CEO’s of Chrysler, GM and Ford held meeting on Capitol Hill on Wednesday in hopes of securing the loans prior to the end of the government’s fiscal year.

D-Calif. Nancy Pelosi House Speaker was present at the meetings amongst other high ranking political figures.

Chrysler CEO Bob Nardelli and Ford CEO Alan Mulally were both responding to reporters in a very positive fashion about the proceedings. General Motors CEO Rick Wagoner on the otherhand had no comment.

The $25 billion loan that is in question is to be used exclusively for re-tooling of plants for more fuel efficient vehicles. In order for the loans to be used, the newly designed production vehicles have to be 25% or more fuel efficient then of those currently in the same class.

All 3 automakers plan to use the funds in order to retrofit their plants from truck to small and medium sized car production. The apparent problem is that none of the manufacturers are hopeful that they will meet the criteria to be 25% more efficient in terms of fuel mileage.

Timing is also very important to complete this deal, as the new fiscal year of the U.S. government begins on Oct. 1st.

In terms of timing both Congress and the White House have to sign off on the deal prior to the loans being available to the companies. So far the White House has dodged questions in the matter deferring the responsibility to Congress.

One must wonder, should the government not provide the $25 billion in funding, will the Big Three have trouble staying afloat, and if not will the Fed throw them a life-jacket?

As a result of a mathematical calculation by the Congressional Budget Office, it might be more difficult for the Big Three to get the $25 billion in funding they were seeking from the Fed.

Director Peter Orszag posted his new estimate on the Budget Office’s Web site on Friday, Sept. 12. Congress relies on the Congressional Budget Office to help it make taxing and spending decisions.

The previous budget estimate was $3.75 billion as to the cost of the loans to taxpayers. Due to the further worsening of the credit markets, as well as several other downgrades by the rating agencies of the automakers credit, borrowing costs are expected to be higher.
This places the $25 billion in proposed loans in question, as the cost of the loans to taxpayers is estimated to be $7.5 billion, which is twice the originally stated amount.

Seems in recent months just about everyone has had a bailout in the financial industry. Now it’s the auto guys that are asking the government for some loose change. $50 billion is loose change compared to the $52 trillion the United States government currently owes, which makes me wonder where they get their money from.

As the Democratic and Republicans gathered for their party meetings, the party buses were not bringing cheerleaders, but VIP’s and lobbyists from the automakers. North American automakers that is. Automakers that are struggling to retain market share, profitability and sales.

Sales are down 20% across the board between the Big Three for the past quarter, which in fact should be called the Declining Three, with sales numbers outpaced by Asian brands.

It is no easy task to maintain a company with unionized workers, retired workers and soaring supply costs. Transportation costs are up, so are health benefits and overhead utility expenses. All of the forementioned would not be a problem if sales would pick up.

Detroit is asking the feds for $50 billion in low interest loans to re-vamp the product assortment and meet fuel efficiency standards set out by CAFE. Asian competitors do not have to worry about such problems, as their balance sheets seems healthy, which guarantees them low interest loans from common lenders such as banks. The Big Three on the other hand does not have the luxury of having a clean balance sheet, therefore will need government backed loans in order to keep interest costs under control.

Thankfully, both Obama and McCain need votes in Michigan and Ohio, therefore both parties are behind the proposal to fund the automakers.

All eyes are on Congress to see if they can raise the required $50 billion.