(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 LIKE Nancy Pelosi. She's a spit-fire and she is VERY smart. I would not be surprised to see NANCY PELOSI as President of the U.S.. I hope she will run in 2012.
UNION POWER. It's not the workers that cause this but the thieves at the top.
We need to overhaul the auto industry. It could be done in such a way that maintains commitments to workers but removes those responsible for bad financing practices. one that removes those who pushed for a marketing strategy of the SUV.
James, I agree. Not only are the execs over paid, so are the workers. How many people to you know that get health benefits after retiring? Auto workers need to find out how the other half live!
How about giving the Big 3 the ability to tell the UAW to renegotiate their contract or pound sand.
Union labor costs are insanely high.
Good these people need a leader to take over their businesses! Socialism on the rise eh with congress issuing leaders to the big 3 and all.
Daggone we are in sorry shape.
Stay out of it, let them fall. American taxpayers have paid enough for your stupid mistakes and greed.
What moron wants to blame the democratic party so bad he/she can taste it, when the democrats haven't had control of the process for most of the last eight years? Oh, yeah, RealityKing...right there in print. How silly of me.
Bit to early to expect sour grapes to have died out as the ONLY response. Not with Ann Coulter and the radical right out there still pumping the hate/scare/bs handle as hard as they can to make money spinning crap out of truth. But, maybe, just maybe, people will gradually start to think about solving the problem more than jockeying for leverage four years from now. The hole is deep enough as it is.
1. All CEOs and officers will give up their 6 or 7 figure salaries and work for an hourly wage of $12.
2. All cars will manufactured in the next year will get no less than 40mpg.
3. No more corporate jets, no more company paid vacations, no more "gifts" to potential investors. Sell off the private fleet of planes and cars.
4. No officer will get a golden parachute ever.
5. Prices of hybrid cars will get cut in half.
While Congress is rightfully at the throats of the Big 3, why are they not after the real financial culprits contributing to the economic turmoil and mess by asking these gluttonous institutions why they are not dropping interest rates on credit card debt of the folks losing their jobs, homes, and well-being? Not saying we Americans did not ourselves contribute to our over-spending, but when interest rates are in the tank, with little more room to maneuver, why are credit card companies not ticking down the rates on credit cards to more manageable levels? 22% versus the Prime....wow!, what a profit margin, and the consumer is just subsidizing the losses in a convoluted fashion, while the financial institutions and credit card companies get fat on their investments and paybacks, yet not lending the free money they got from the government. Sure like to know why those questions are off limits to be begged and asked. Now the institutions will end up with sub-prime credit card debt, a license for more free government money, it is a spiral down no one seems willing to look at through the rose colored crystal ball. I just want to know why the powers that be do not go after them, at least until things tick more positively on solid ground.
Reid and Pelosi have drafted reasonable safeguards to protect an investment in the auto manufacturers. What are the penalties if they fail to comply with the terms once they receive the money though? With this market, it is difficult to see much recovery in the near future. Maybe they need to try some innovative marketing strategies – like leasing autos on a month to month basis.
An attemt has to be made to save the industry a jewell of America ingenuity. However, if they blew it, mecanism has to be put in place to recoup the bail out fund all of it. This can be done by special prerogative over any other creditors.
I agree with a previous posting. Where in this is a demand for union caps? Talk about protecting your own constituancy.
I am especially happy to see that Pelosi and Reid have included the demand that executives not receive dividends, excessive compensation (including bonuss) and golden parachutes. The 3 stooges that went to Washington to beg for our taxpayer dollars were not even smart enough to us descretion by flying on private jets.
It has been such an insult to all of us who are working hard and still struggling to make ends meet. No one is bailing us out so how dare they flaunt their riches in the face of the people who have to continue to sacrifice so they can feed their families.
I think that 25B should be given the the employees of GM, Ford and Chrysler and other unemployed or soon to be unemployeed citizens for job retraining and unemployment benefits to help them get back on their feet. Let the big 3 executives and the union leaders (unions are not what they used to be either (its all about the money) see what it means to miss a meal or have trouble making their mortgage payments.
are these people stupid–its not enough.. the CEO's need to step down before anything is given
Seems like really fair and reasonable requests. As a tax payer, I would be satisfied loaning the auto industry money under these conditions (and that's only because so many livelihoods are tied to the industry, and the alternative–millions of people losing their job, which takes hundreds of millions out of the tax base and spending, causing more businesses to go under and more people to lose their jobs, meaning millions of families going hungry and living out on the street–is actually worse than loaning them the money).
Congress is a bunch of idiots. All they do is whine and point fingers.
Where was this leadership and accountability during the Wall Street bail out?
I myself was insisting that some provision be included in that bail out which required the banks to lend the money to the public and to curtail bonuses to firms recieveing the money.
Hell, maybe I should be in Congress since I was prescient enough to call for these safeguards.
I expect of of 535 members, at least 1 Congress member would have raised this.
you know I would like for some one to make some GOOD
common sense sure the auto industries need to come up
with a real plan but guess what if they are not bailed out
this country is done, it would be a major trickle down of
employment we may not like it but it have to be done
think about it if they go so goes a lot of other jobs that
depend on transportation and more
Realityking is ReallyStupid .....
i think the leaders of the big 3 showed where the problems of the auto industry lay – when they flew into Washington in their private jets. if they had to fly private – couldn't they have at least jet pooled?
that is why the big 3 have problems – bad leadership – the problem isn't just with the labor force and the union.
union people can build good products when they are given good products to build.
Pelosi and Reid are dangerous people. Heck if it wasn't for the public demmanding no bailout, Pelosi and Reid would have given them a check , no questions asked. I think if Obama wants change get rid of Pelosi and Reid.
As a taxpayer, I am pleased at the expectations Congress has given to the Automakers requesting funding. When we go to apply for a loan, we must explain what the loan is to be used for, etc. Why would they expect to receive such a loan without requesting this valid information. Since the automakers have expressed how dire their situation is, I find it quite odd that they seem unwilling to provide the information requested.