November 21st, 2008
03:35 PM ET
6 years ago

Pelosi, Reid detail demands from auto companies

(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

Text:

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.

Sincerely,

Nancy Pelosi Harry Reid

Speaker of the House Senate Majority Leader


Filed under: Congress
soundoff (164 Responses)
  1. maestro

    So it's completely absurdity when the gov't take money from the rich and gives it to the poor, but it's considerable when the poor fund the rich.
    Are, You, Kidding, Me?!

    November 21, 2008 04:41 pm at 4:41 pm |
  2. Pelosi WILL cave into the Big 3.

    You know she's going to give them $ 25 billion and more if they ask.
    She's scared of what might happen if she doesn't and she's too ignorant to understand what will happen if she does. She's out of her element and Obama ought to guide her through his economic team.

    November 21, 2008 04:41 pm at 4:41 pm |
  3. maestro

    *complete

    November 21, 2008 04:43 pm at 4:43 pm |
  4. Dave C - NJ

    Why didn't we demand a plan for the Wall Street bailout?
    Half the money is gone and no one knows to where? What???

    November 21, 2008 04:43 pm at 4:43 pm |
  5. worriedmom

    oops forgot, add Barney Frank to that list of Obama needs to rid of .

    November 21, 2008 04:44 pm at 4:44 pm |
  6. Pelosi is in way over her head.

    Barack-get her some help-this is a huge economic decision for the country and Pelosi and Reid have neither the background nor knowledge to make these kinds of decisions.

    November 21, 2008 04:44 pm at 4:44 pm |
  7. c2

    The plan must ensure that auto-workers that don't want to move to new factories can continue to meet at the cafeteria of the nearest plant and continue to collect pay. This union rule must stay. Any union worker not happy with his job must receive full pay and be able to stay at home. Union workers should receive triple overtime if they are working more than 8 hours per day or touch more than one tool in an 8 hour shift.

    November 21, 2008 04:46 pm at 4:46 pm |
  8. Rob

    Reid and Pelosi's requirements:

    1) Keep the unions exactly as they are – hey, they're a big voting base for the Dems.

    2) If CEO's are Republicans, fire and indict them

    3) Free cars for Reid, Pelosi, and Obama.

    4) Let Congress impose oppressive and irrational environmental demands.

    Obama, Reid, & Pelosi – Us 3 first, America....maybe

    November 21, 2008 04:47 pm at 4:47 pm |
  9. Boered1

    What moron doubts that republicans will try to stop the helping out of the worker over the masters... I mean CEOs?

    November 21, 2008 04:48 pm at 4:48 pm |
  10. Stu-Florida

    I don't see where it's written, they should bounce the unions... the creators of entitlement, lazy, workers with a you can't fire me attitude. The unions had their place in history. Now it's time to give them the boot. They are the creators of incompetence. I always wondered whenever they would call a strike... "just what do these morons want now"? How much more can they squeeze out of an employer?
    The cars and trucks produced had an inherent planned obsolence. They would literally fall apart after the warranty... without any help from the "Big Three".
    This is the Thanksgiving pie they made... let them enjoy it!
    The "CEOs" have their share to blame as well. Time for an employee owned automaker where if you don't do your job, you actually get fired... what a concept!

    November 21, 2008 04:48 pm at 4:48 pm |
  11. kcloud

    The introduction to this letter was only two sentences long, and still "issued a leader" and "The letter lists the deails" was completely overlooked.

    Wow.

    I still love you, cnn, but come on!

    November 21, 2008 04:48 pm at 4:48 pm |
  12. Willy Brown

    You clowns wanted change well you're going to get it, democrat style. Tax, tax and more taxes!

    November 21, 2008 04:49 pm at 4:49 pm |
  13. Anonymous

    I'm just happy to see that they're twisting the arms of these automaking fat cats in the direction of manufacturing fuel efficient cars. It's a crap deal no matter how you figure, but maybe some amount of good can come of it... like saving the f-ing planet.

    November 21, 2008 04:50 pm at 4:50 pm |
  14. marty

    Unless something equivilant is sent to the labor unions, making similar demands of concessions, this will not be viable. Even so, to prepare all they are demanding in less than 2 weeks, with a holiday weekend in the middle of it, is ridiculous. Especially without any demands made of labor unions that have driven up the cost of doing business. Some of the blame lies with us as consumers, as well. The auto companies have not forced us to buy big, gas-guzzling vehicles. We have demanded that they provide them. So instead of pointing fingers at the auto companies, we need to look at our own complicity in their current malaise. This is not a problem of just their doing.

    November 21, 2008 04:51 pm at 4:51 pm |
  15. Krystyn

    I think the unions need to be held to task here too and I hope Obama has the mettle to do it.

    $75 an hour? For real?

    November 21, 2008 04:51 pm at 4:51 pm |
  16. Eric in Lincolnton, NC

    I to am in need of a bailout. My job was lost and the company closed but we did not recieve a bailout. Im struggling to make my obligations and also my mother was involved in a accident a couple weeks ago which makes it more difficult. What not tell the banks who got a piece of the $700 Billion to apply that money to exsisting debts people owe. I mean they are getting bailed out while the consumer is still bombarded with rising cost, increasing interest rates because these greedy companys see the need to increase interest rates on people and lower credit lines even if we have never been late which i have not. What congress needs to do is force these banks to lower interest rates on existing loans. That is a better way to stimulate the economy.

    November 21, 2008 04:52 pm at 4:52 pm |
  17. Beth - who voted for Obama

    Pelosi is out of line. She needs to demand that NONE of the money will be used to pay for union contracts and obligations. That needs to be undone. Maybe the auto industry should file chapter 11, so they can get rid of expensive union contracts. No other worker in this country is being bailed out, yet we have to use OUR taxpayer money so that union workers in the auto industry can continue to receive money even if they don't work? NOT MY MONEY! If Obama goes along with Pelosi, you bet we'll be voting the republicans back in 2010, and maybe even a moron like Palin will have a chance in 2012.

    Wake up Democrats! Pelosi, get a clue!

    November 21, 2008 04:53 pm at 4:53 pm |
  18. Bob, Seattle

    Notice the incredible BUSH bashing at the outset. Nancy and Harry never miss a beat. The real reason they want the auto industry to respond so quick is so that when the plan ultimately fails, Nancy and Harry can keep on blaming BUSH as he was the President when the auto bail out is to be presented. Nancy and Harry are expert at hedging their bets. Totally gutless. As usual.

    November 21, 2008 04:53 pm at 4:53 pm |
  19. Reality

    Apparently Pelosi and Reid forgot about Bush's 25 billion dollar allocation to US auto manufacturers that THEY BOTH SIGNED THIS YEAR. Short term memory loss?

    Of course Pelosi and Reid will do whatever the unions tell them to do. Never mind that HONDA employees just as many AMERICANS in AMERICA and somehow manages to make profits and pay their non-union employees BETTER WAGES.

    What PAC will get American tax dollars "redistributed" to it next? Are we going to give the corporate corn farming industry billions in subsidies to make un-green ethanol that causes catastrophic ruin to our atmosphere? Oh wait, the dems already did that...

    November 21, 2008 04:55 pm at 4:55 pm |
  20. David in CA

    Congress needs to demand a clear plan for corporate restructuring. It's good that this letter wants to protect the taxpayer's money, but what's the point in feeding money to a failed business model? Make the companies go through the motions as if they were filing for bankruptcy, and then give them the money to operate and pay off creditors.

    November 21, 2008 04:55 pm at 4:55 pm |
  21. Karen Forsten

    Releived to see these automakers are being held 'accountable.' And a deadline for a restructured business plan is in place! Too many people in Michigan, Illinois, Indiana and Ohio are already out of jobs due to the mismanagement of the American automakers.

    Thank you Ms. Pelosi and whomever else contributed to this policy! Kudos to all of you.

    Sign me,
    An American Taxpayer!

    November 21, 2008 04:56 pm at 4:56 pm |
  22. momof4

    WHO CARES ABOUT THE BIG 3!!!!!

    my house if in foreclosure

    my savings is gone

    my kids will have nothing for Christmas this year

    my husband is a good honest man who lost his job because the company he worked for went belly up

    WE DON'T OWN ANY CREDIT CARDS

    our car is an old 91 suburban WE BOUGHT AMERICAN!!!

    we cant afford a new car!

    I never bought into greed...i don't own a flat screen...i don't even have cable.

    i don't even own a cellphone

    we don't have the luxury of eating dinner every night

    WHO'S GOING TO BAIL US OUT????

    what makes the auto worker's jobs more special than the jobs Americans are losing?

    what makes their families and homes worth saving over mine?

    why cant they suffer with the rest of us????

    My family is going to end up living in our old suburban!!!

    Pelosi and Reid should concentrate more on investigating bush for war crimes

    TO HELL WITH THE AUTO INDUSTRY!

    November 21, 2008 04:56 pm at 4:56 pm |
  23. Concerned American

    Ah, yes. Nothing like teetering on the precipice of another Great Depression caused once again by Wall Street and the Repugs. What gets me is how quick the Rush and O Reilly crowd are at blaming the American worker for the plight they have been placed in by the mismanagement of America's economy by corrupt, inept, and overpriced CEO's and financiers who spend all day making money off of other people's money. Drastic measures are needed to keep this from becoming a free fall which will lead to the flight of America's remaining capital abroad. Don't expect acts of patriotism or sacrifice from the Uber Rich who will be the first ones to take their money and run for the exits!

    November 21, 2008 05:02 pm at 5:02 pm |
  24. Dave

    Actually, I'm of the opinion that the Democrats never planned to bail out the industry, but they have to make it look like they tried so that they don't take the blame for the fallout. The industry needs to go to Chapter 11 because it's become a malignant tumor on the American economy. How many times can the same 3 companies get bailed out before we say enough is enough? It's for the best for the industry and the country. It just won't be a very pleasant transition so they want the blame to land on Bush.

    November 21, 2008 05:02 pm at 5:02 pm |
  25. Dave, Central Illinois

    Funny how the plants in right-to-work states are doing much better than in Detroit. I guess the overhead from paying union bosses and thugs for doing nothing really is a drag. How about getting paid for the merits of your work? Those of us who do not belong to a union seem to get along just fine on that principle.

    November 21, 2008 05:04 pm at 5:04 pm |
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