(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
CNN, please correct the typos in this article. It really makes us writers look bad. :-(
harry Reid have issued a leader to the CEO's of the big three auto companies, first obtained by CNN.
What moron doubts that democrats are going to bail out the unions..., I mean auto makers??
Good! If they are going to get any money, which they probably will, they should have conditions attached.
PELOSI AND REID WILL BANKRUPT THIS COUNTRY IF YOU LET THEM!!!!!!!!!!!!!!!!!
Here is my plan
1. I'm a couple months behind on my bills
2. I hope my next paycheck will cover my bills
3. I'll barely have enough food for Thanksgiving
4. The kids are aware that Christmas in cancelled.
How much do I get?
Help those automakers! If Paulson can give billions to banks without a paper trail, they can give 25B to 3 companies that are more tangible! At least I know where that money is going!
nothing abour breaking the union....
unless that happens, they are just delaying the inevitable......a bad product produced by over paid employees??................I just can't imagine why they are failing
Demonstrate the auto companies’ ability to achieve....
learn how to spell letter!
The cascade effect on other businesses if even one of the Big Three collapses would be devastating to the nation and would sure further corrode confidence in our economy.
The willingness of Congress to consider a plan to help the industry out of the jam it's gotten itself into is evident in this letter, right along with its desire to protect the American taxpayer from being left holding the bag in the future.
As a layman to all this, I see plenty of safeguarding conditions in this letter to protect the taxpayers and I hope the industry, for all our sakes, will embrace them and return to Congress by Dec. 2 with all the requisites fulfilled.
This is not rocket science.
1. Remove al lof the regulations for the 3 car dealership, that are killilng them that were put in place by the DEmocrats.
2. No money till they sit down with the Unions and renegotiate the pension and hourly ratae of the employyee's.
3. CEO to give up 30% of their pay and 50% of their percs, contributing the deficit of their company.
4. Put a freeze on all bonoues, raises, etc. for at least 12 months.
5. Go back to the drawing board, and slow dow the productions, of any car, truck etc, where they are losing money.\
6.Most of all keep Gov. OUT of the big 3...
Run the company like many of us are now forced to run our homes, with out a handout.....
Bail out the unions? You're the dimmest bulb at the Sylvania plant.
I did not see anything in the letter regarding labor costs or unreasonable union contracts.
Issued a leader huh?
Mighty high expectations for a bloated, top heavy, industry that fought tooth and nail to equip cars with seat belts, fought air bags, fought to reduce fuel efficiency benchmarks, fought emission standards, and produced year after year pieces of junk that their dealerships wouldn't stand behind when failures occurred during warranty periods. My favorite was "the front right wheel fell off because you make too many right turns". $28 million annual salary for the auto exec. I have no sympathy. I doubt they can change of their own volition.
I can name the correct policy in one word: BANKRUPTCY!
We owe these junk compnies nothing! We owe these union scum nothing!!
The Democracts should be careful...don't forget we picked them as lesser of two evils, not because we actually think they are doing something right. This is a free market, stop bailing out the failures!
The automobile industry is the first thing that should have been bailed out. That is the heart of America manufacturing. Wall Street should not have received any taxpayers money. The Democrats have quite a mess to straighten out from the Bush years!!
Realityking......The deal is already in place with UAW for 2010. GM will be paying aprrox $44 per hour instead of the $73 it pays now which is inline with Toyota and Honda. So they only need a bridge LOAN, not a bailout like the banks got. Speaking of which, Did Congress grille the banks about plans, etc, NO, they just handed over billions which seem to have only gone into the banks pockets. By the way, I read that Japan is giving Toyota $56 Billion to get through the credit crunch which is the real problem. If GM sold the same amount of cars in 2008 as they did in 2007 they would have a profit! The real problem is if people can't get a loan to buy a car guess what, GM doesn't sell cars, nor does Toyota or Honda.
There is a request to bar "golden parachutes and excessive compensation" but there needs to be some union negotiations as well.
Yeah better to let Detroit go bankrupt so the Republicans and the worst President in history W get to add that to their wonderful track record the past 8 years.
The most critical expectation of the public is that whatever plan is approved of as ensuring viability of the auto industry be subject to continuous review by Congress. If the auto companies do not follow through on their commitments, the loan would be immediately callable. There must be no possibility of the bait and switch pulled by the Treasury secretary whereby the purpose of the bailout was defeated by not requiring banks to relieve the mortgage crisis as a CONDITION of receiving the funds.
For God's sake does Harry Reid ever smile??? he always looks like a miserable old man-smile a little!!!!
What moron doubts that if something isn't done for the American auto makers, and thus their employees/unions, the U.S. economy will effectively collapse.
This is exactly the kind of requirements that should be attached to a bailout. Provide the American people with advanced fuel technology American made vehicles. In the transition, provide us with carbon fuel efficient vehicles. Promise us, the American consumer/taxpayer, that you will become a properly managed, financially viable industry.
Failed business models lead to failed businesses, whether we like it or not. I appreciate Congress' desire to help the sector, but I sincerely doubt anything that can be submitted by December 2nd would indicate the drastic turnaround required to restore competitive edge to these corporations. You can lie to yourselves all you want, and throw taxpayer's dollars at the problem, but competition is competition. Every market goes down and up. Companies mst be allowed to fail.