RELATED
House and Senate leaders are tying strings to the automotive bailout sought by domestic automakers.
Speaker of the House Rep. Nancy Pelosi, D-Calif., and Senate Majority Leader Senator Harry Reid, D-Nev., sent a letter to the executives of the big three automakers on Nov. 21 outlining the items that must be included in their request to Congress for economic assistance.
Congress has asked that the plan be submitted by Dec. 2 and has tentatively planned to come back the week of Dec. 8 to consider an economic assistance measure for the vehicle manufacturers, according to a legislative report from the Automotive Aftermarket Industry Association (AAIA).
Among the items that must be included in the plan according to Reid and Pelosi are:
- A documented assessment of the auto companies' current operating cast position, short-term liquidity needs to continue operations as a going-concern and how they will meet the financing needs associated with the plan.
- Estimates of the terms of the loan requested.
- Specific measures designed to ensure transparency and accountability, including regular reporting to, and information-sharing with, any federal government oversight.
- Measures to ensure that the government loans get paid back first, before other loans the manufacturers might have.
- A bar on payment of dividends and excessive executive compensation, including bonuses and golden parachutes.
- Provisions for addressing payment of health care and pension obligations.
- A demonstration of the car companies' ability to achieve the fuel efficiency requirements set by Congress last summer, and become a long-term global leader in the production of energy-efficient advanced technology vehicles.
- A requirement that government loans be immediately callable if long-term plan benchmarks are not met.
The letter came after congressional leaders decided not to bring a car company bailout bill to a vote due to strong opposition from the White House and Republicans. Instead, the Democratic leaders decided to request the executives to provide a detailed plan of how they would use the money to remain financially viable.
However, notwithstanding the letter, Pelosi raised the possibility that Congress might act even if the car companies failed to submit a workable plan.
"Doing nothing is, I don't think, an option. But what we do will be determined by what they do," Pelosi said.
