(CNN) - House Speaker Nancy Pelosi and Senate Majority Leader harry Reid have issued a leader to the CEO's of the big three auto companies, first obtained by CNN.
The letter lists the deails of exactly what they want submitted by December 2.
Full text of the letter after the jump
Dear Messrs Wagoner, Mulally, and Nardelli :
We recognize the importance of the domestic automobile industry and are committed to working with you to ensure its viability in the years to come. One in 10 American jobs is related to auto manufacturing; our national security depends on the industry’s technologies and manufacturing capacity; and our competitiveness in a global economy depends on its pursuit of excellence.
As you know, Congress has provided President Bush, the Chairman of the Federal Reserve, and the Treasury Department the authority they need under the Emergency Economic Stabilization Act (EESA) as well as other authorities to provide short-term financial assistance to the auto companies.
Unfortunately, the Bush Administration and the Federal Reserve have thus far declined to use their powers to improve our nation’s financial stability by assisting the auto industry. Notwithstanding existing authorities, this Congress is prepared to consider additional legislation that would give the assistance you seek, provided that you submit a credible restructuring plan that results in a viable industry, with quality jobs, and economic opportunity for the 21st century while protecting taxpayer investments.
In order for Congress to act in a timely manner, this plan must be presented to Congress by December 2nd, specifically to Senate Banking Committee Chairman Christopher Dodd and Financial Services Committee Chairman Barney Frank.
It is critical that you meet this deadline since we have announced we are prepared to come back into seion the week of December 8 to consider legislation to assist your industry. We intend to give pertinent agencies within the executive branch, the Government Accountability Office, the Board of Governors of the Federal Reserve, as well as outside experts, the opportunity to comment on your work.
The plan must:
· Provide a forthright, documented assessment of the auto companies’ current operating cash position, short-term liquidity needs to continue operations as a going-concern, and how they will meet the financing needs associated with the plan to ensure the companies’ long-term viability as they retool for the future;
· Provide varying estimates of the terms of the loan requested with varying assumptions including that of automobile sales at current rates, at slightly improved rates, and at worse rates;
· Provide for specific measures designed to ensure transparency and accountability, including regular reporting to, and information-sharing with, any federal government oversight mechanisms established to safeguard taxpayer investments;
· Protect taxpayers by granting the most senior status for any government loans provided, ensuring that taxpayers get paid back first;
· Assure that taxpayers benefit as corporate conditions improve and shareholder value increases through the provision of warrants or other mechanisms;
· Bar the payment of dividends and excessive executive compensation, including bonuses and golden parachutes by companies receiving taxpayer assistance;
· Include proposals to address the payment of health care and pension obligations;
· Demonstrate the auto companies’ ability to achieve the fuel efficiency requirements set forth in the Energy Independence and Security Act of 2007, and become a long-term global leader in the production of energy-efficient advanced technology vehicles; and
· Require that government loans be immediately callable if long-term plan benchmarks are not met.
The auto companies’ shareholders, business partners, and prospective benefactors—the American people—deserve to see a plan that is accountable to taxpayers and that is viable for the long-term. In return for their additional burden, taxpayers also deserve to see top automobile executives making significant sacrifices and major changes to their way of doing business.
We look forward to working with you to ensure a viable American automobile manufacturing sector for decades to come. If we are successful, we can ensure a brighter future for the automobile industry, our nation, and our planet.
Thank you for your prompt attention to this matter.
Nancy Pelosi Harry Reid
Speaker of the House Senate Majority Leader
I love this article, and look forward to what GM has to say about the offer.
The transparency part is priceless!
While I definitely agree that CEO and top executive compensation should be addressed (some of these people are making twenty or more times the salary of the President of the United States, for crying out loud, though it isn't much different from top executives at most companies which has gotten completely out of whack), I personally think that labor compensation should also be looked at.
It may be an unpopular thing to say, but my understanding is that employees of these auto companies make more than the average American worker, more than school teachers with a lot more education, more than a lot of people. The unions are expecting taxpayers, most of which make less than their members, to support them? That seems a little unreasonable. And from reading the various articles that have been online lately, the way the union contracts read, if the auto makers shrink their businesses to be competitive with others, they'll still be required to pay the salaries of people they lay off. In no other industry does THAT kind of security exist. In my opinion the auto workers should have to take their chances with unemployment along with the rest of us in this economy. Otherwise where's the incentive ANYWHERE in the hierarchy for the auto industry to become competitive with Japanese auto makers and give the American public the fuel-efficient, low-polluting cars they want to buy? The auto industry has put up all kinds of resistance to Congressional efforts to increase fuel and emissions standards, which is one of the reasons their cars aren't selling. It isn't JUST the economy, because people are still buying Japanese cars.
Everyone should be emailing their senators and reps. I emailed mine today asking for an accounting of how my tax dollars are being used (and not just for these bailouts). It is getting old to see all these corps begging for money while the average family is suffering.
I think the "big 3" executives and the labor unions need to make big concessions before getting that 25B. How about everyone taking a pay cut to save their companies. It is better to take a cut in pay and keep your jobs and benefits than to have to live off the poverty level of temporary unemployment benefits. Wake up people!!!!!
I love this article, and look forward to what GM has to say about the offer. Now they can't blame congress if they fail, only themselves. No scapegoats.
The transparency part is priceless!
Labor union is the cancer. Get rid of it and you've got half the problems solved. Every time I see that self-serving UAW's president openly campaigning for the big 3, I want to slap him right in the face!
What plans and conditions were required for the bailout of the financial intuitions???
Your 100% right RealityKing. You can bet your life the Democrats will do anything they can to bail out the UAW. Obama will do what it takes becauses he owes them BIG TIME.
But here is my question,,, if Pelosi and Reid can sit back and make DEMANDS,,,,, why can't we?
Why can we not DEMAND that our elected officials be held responsible for stupid dumb mistakes and making poor judgement calls. Regardless if your a Dem or Rep, we the people should be able to hold our elected officials responsible for making a mess of this country. But it seems the big money political machine will continue to elect who they want, when they want.
Congress has a lower approval rating than Bush does, so why can we not say, we want you people ou, or you will now start answering to US,,,, the people who put you in office.
Hey, Pelosi is making like she is doing something. Wonder how her book is doing? Wonder what she drives?
Obama, Pelosi and Reid it's time to pay back the unions for voting for them.
The unions need to give back and the CEO need to give up alot. The CEO's should give some of their money to the workers not ours.
Don't you dare give $25 Billion to the Big Three Auto Makers. I have heard some remarks from other people that they don't need it. Why give them the money when you know that they will ask for more. And they will too.
Autoworkers have , for over a year now, taken a cut in pay and pay more for health coverage. Toyota and Honda have received big tax incentives to build here in the U.S. They also do not have the retirees that G.m. Ford ,and Chrysler have. They built up those companies and deserve a pension.
If any of the big 3 companies are planning to send ANY job ANYWHERE outside the USA the answer for ANY MONEY should be ABSOLUTELY NO!!!!!!!
We tax payers just gave up $700B to banks and AIG without a plan. My main concern is the millions of people who would be without a job should the big 3 fail. Either way we the tax payer are going to pay either we bail out the big 3 but do it with stipulations and oversight or we pay unemployment benefits then possibly welfare benefits to the families who are going to be affected by the decision. As far as the CEO's flying to Washington in their privates jets i could care less about. It would be different if they just bought them them asked for a bailout. Also Bush and the Republicians have had their ways (rephrased to be printable and nice) with tax payers money for 8 years and look at us now. Use my tax money for the better of the country and my fellow citizens please!!!!!!!!!!!!!
When automakers make hugh profits they did not share with people, so why should people foot the bailout? The US made car prices are outrageous!
Correction: When auto makers make..
...should read when the US automakers made ....