(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
Asking for a letter now..guess the heat was to much for the liberals. The taxpayers were not willing to allow the liberal twins of pelosi/reid to just hand over 25 billion taxpayer dollars with no conditions like they wanted. I guess the unions don't like the change on what they were promised before the election.
If the auto industry is going to retool for long term viability, it's time to adopt the metric system. Only the US, Liberia and Myanmar are not using the metric system. It's a global economy, but the Big Three are on another planet. Since everything is made with CNC machines, it is only a matter of changing a few parameters in a computer program to make metric parts.
Spell check, an actual proofreading or something that approximates just a tiny bit of interest in not wanting to look like a poorly run, underfunded grade school paper would be nice.
I, as a taxpayer wants to see the automaker's proposal, and be allowed to comment on it to my congressional leader.
Since we are the going to be the one's footing the bill, we should have a say in what happens.
Is this a joke? They basically asked how much money do you need, remember you have to pay us back, and you will only get it if you sacrifice profits to make green cars. What happened to negotiating a realistic labor contract to get competitive with foreign car companies manufacturing in the U.S., a plan to reduce number of brands, capacity, dealerships?
Uh CNN, how mixing in spellcheck, anyway, I hate to say this to my fellow Dems and Independants, but let them fold. DO NOT BAIL THEM OUT. I agree with Republicans 100%. Hey congress, especially on the donkey side, since you are having a hard time comprehending what most of America is saying to you, maybe you might understand it this way, Let's just say the Big 3 are crackheads, and we the American People are the Rehab center, and you are the parents in denial, IF YOU KEEP GIVING THEM MONEY TO CONTINUE WHAT THEY HAVE BEEN DOING, THIER HABIT GETS WORSE, AND WHEN THE BURNED THROUGH THE 25 BILLION, THEN WHAT ARE YOU GOIGN TO DO? GIVE THEM MORE OR LET THEM DIE? So quit supporting thier habit and let them fall on thier face, they are not going out of business. Someone will buy them (hopefully someone here in America), we along with that someone will rehabilitate them, and in a few years, they will be a productive company again. Trust me. This is not the first time a business failed and rebouned later and it wont be the last.
The union agreements are just as much to blame as the CEO's. If the Big 3 are bailed out I have the feeling that contracts will not be renegotiated and it will just put off bankruptcy for the short term. CEO's will pocket what they can while showing evidence of an attempt to make the changes promised. Then they will say they are making progress but under-estimated the amount of capital needed to reinvigorate the industry and ask for more of the unused bail-out money. This looks like nothing more than a sham. They should either be allowed to go into bankruptcy if they are unable to currently change their business model, or allow them to be sold to a foreign car company whose American investments and auto plants seem to be functioning fine, as well as having cars that are more efficient than their American counterparts. Everyone should be writing their senators and congressmen.
Finally someone asked what they will be using the money for! We as Americans need to realize that to let the auto industry fail, would not only harm those that work for the "Big Three", but also other industries related to the auto industry such as auto parts makers as well as steel and rubber manufacturers. We cannot allow that many jobs and retirement and health benefits to be lost for that many Americans. These executives that blindly led these companies into this situation should be fired and any compensation benefits they receive or are entitled to should be redistributed back into the companies.
This is two politicians we can do without. After waiting all these years to be in the majority we are stuck with these two losers
Hey, this sounds pretty much like they've covered their bases–very much unlike the bank bailout, in which there's still no accountability structure and which Bush, Paulson, Bernanke, and the fat cats are only abusing to get richer. At least the car manufacturers are thinking about saving jobs ...
Where does it demand them to keep the jobs in the US? It stands to reason this would be a perfectly good opportunity to see them open more plants here as opposed to abroad.
Democrats bailing out the unions? Is that who owns and runs the companies?
How about the Republicans bailing out all the financial companies, lining their buddy's pockets with even more money before the door hits them on the backside?
! knew CNN wouldn't post what I had to say...
welcome to 1984
i challenge pelosi an reid and the rest of the house an senate to
work for one dollar per year , give up there pensons and buy there on insurance. iam sure all polticians will feel that these significant
sacrifices are the least they can do the way goverment does bussiness
I am with you "LyonsPhilly!" Who do I address a letter to or how do I get an audience with Congress to plead my case & request a bail out? I recently adjusted my withholding allowances to ensure my taxes were paid & not a dime more. After that $700 billion dollar bail out, I figured the government had nothing better to do with my money & I need to bring home as much of my gross, as possible!
So much of our economy, particularly in the midwest, depends on the automobile industry that it could be catestrophic not to provide at least some monies in the form of low-interest loans. Without these loans, jobs would likely be lost not only by employees of the "big three" and their suppliers, but by local businesses of every kind who count on these workers as their customers.
Bankruptcy "reorganization" is not truly an option. I wouldn't buy a car from a company who was in bankrupcy and I can't imagine that many people would, considering there is no gaurantee that that company would be around for the life of the car to stand behind it.
Of course, everyone from the president to the janitor would have to make some personal concessions, and the corporate leadership would have to agree to some big changes, but the result would be a healthier domestic auto industry and the retention of many (still) good-paying jobs.
Who is kidding who??? To provide a meaningful and excuatable plan with the detail and variations requested by the House and Senate within 8 working days is an impossible goal!!! Who is going to evaluate the plan to determine its feasiblity ??? I do not think that the Congress has the expertise to evaluate the plan.
In my opinion it is a foregone conclusion that the Congress will give the auto industry a bailout. This bit by the Speaker and Majority Leader is just a ploy to placate the taxpayer!!!!!
A question - Why arn't Toyoto and Honda included in any discussions of a bailout package??? Maybe they have won the competion!!!!
Al Gore! Looking for Limlight again... His Idea of Glabal Warming is Stupid... He has no Natural Skills Either...
Anyone who complains about union labor costs without bringing up CEO pay being 50-100 times union labor pay is willfully ignorant.
Adjustments to the labor costs and union contracts would be within the plan that they devise. Therefore, these would fall under the first requirement of the plan – accounting for how they plan to meet short-term and long term obligations and becoming viable companies in the future.
I do not believe that Congress can or should dictate the details of the automakers plan, but they can and should require that they have a reasonable one before they give away taxpayers money.
We saw what happened with the $700 Billion given away without a plan ... the Treasury Secretary seems to be winging it from day-to-day and its not clear the $$$ are doing much good.
I recently heard a radio ad for a new chevy SUV. The name escapes me at the moment. But, I do remember in the ad how they were flaunting it's economic potential with it's "24 miles per gallon – well suited to those long family trips."
24 mpg. 24.
That's what you call economical?!? 24!?
Ok, "Big Three". (Oo0o scary..) Stop kissing the rear ends of the oil businessmen long enough to let your company listen to scientists. There is NO EXCUSE whatsoever that the entire country is not driving 100mpg vehicles. NO EXCUSE. If they even have to be powered by gasoline.
My family has bought Honda vehicles made in the USA traditionally both for economic reasons and reliability. Now I'm thinking that cars built elsewhere look a bit better, if you get my drift. I'll get one of those French air-powered cars and shuttle homeless people around just to piss you off.
Also, you show up to beg for money in private jets. How? How could ..? Gah, I am just lost at this point. I have student loans, rent, utility, medical bills, insurance bills, and surprise expenses to take care of, I know relatives, friends and families who are canceling all recreation because of costs, and you show up to beg for money in private jets.
What are we thinking to give them more money? Makes no sense to me. They have not been able to run their respective companies now who says they will do it with a bailout. I hope Congress really take a hard look at the their plans. I do not trust any of them.
No that the US car companies are down on their knees, now is the perfect opportunity for the government to FORCE these companies to change their ways. 2 Points:
1) Hey GM, you want my money? Then every car you manufacture in one year BETTER BE flex-fuel. I'm talking gasoline, bio-diesel, and natural gas...
WHY WAS THIS NOT MENTIONED IN THE LETTER?
2) There are essentially 2 costs that go into making a car: labor and materials. Materials costs worldwide are essentially the same given globalization. So no car company in the world really has much of a competitive advantage on that front. But US labor costs (i.e. Union Contracts) are ridiculously high, and that is why the US is not competitive.
How is it fair that under-educated laborers get paid $30/hr. Hey everyone in a union, you want to keep your job? You should consider a pay-cut…or you can be stubborn about it and crash-and-burn with the rest of the US auto industry. $20/hr is a lot better than $0/hr. Think about it.
OF COURSE, RE-NEGOTIATING LABOR CONTRACTS WAS NOT MENTIONED IN THE LETTER. Pelosi’s ideology (and democrats in general) about always having to 'protect the people' happens to be a really bad idea for everyone's long-term prospects of keeping a job.
The CEO of Japan Airlines gave himself a pay cut and now earns less than his pilots, he gave up his cushy perks, he has lunch in the cafeteria with his employees, and he takes the bus to work. I'm completely disgusted with the greed and expectation of entitlement of the CEOs in this country, not just in the auto industry but the others as well.
who types this and to think there are educated smart and hardworking pple like me who are stuck wking @ crappy jobs who could do a better job than this.