(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
this bail out is such a scam. just a final blow to the american tax payer before the crooks leave office. I laugh at the thought of the big 3 actually being able to pay back 25 billion dollars with there shoddy merchandise and horrible union workers. 75 dollars and hour to screw some bolts? They should be making the same wages mcdonalds pays.
Who is the leader they issued? CNN, do you have any editors on your staff?
Bankruptcy is the answer. We need new companies making viable vehicles. Maybe they can sell their jets on e-bay.
A November 21st, 2008 5:05 pm ET
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
Actually you are an idiot, the 25 billion, unlike the 700 TRILLION the republicans GAVE away, would have been a LOAN at 5%. I now see why the economy is so bad idiots like you do not know the difference between GIVING MONEY TO BANKS WITH NO RESTRICTIONS and LOANING MONEY TO AUTO MAKERS... idiot
With Pelosi and Reid dictating we are doomed!
A question — Why arn't Toyoto and Honda included in any discussions of a bailout package??? Maybe they have won the competion!!!!
Actually JAPAN has already provided a bailout to their automakers.. try actually looking at some real news instead of just reading blogs for a change
I would also like to see ALL automobiles produced by these manufacturers produced in the USA by American workers.
If taxpayer money is going to be lent, it must be spent to produce cars here at home, not in Mexico, Canada, and definitely not in Russia!
I am pleased to see that bonuses and other financial gains for those responsible for the condition of the industry was addressed in the letter.
It is only fair for the congress and senate to know what the auto execs are going to do with the tax payers money and not simply dole it out to them and no questions asked which I think Henry Paulson did in giving the money to the bank execs withour first asking them how the money will be used, a big mistake.
Congress is not filled with thinkers only those that point fingers after the fact.
The lack of conditions on the $700B was a glaring ... at least to me ... shortcoming ... 6 weeks ago.
Smarten up Congress.. can we elect some people with business experience or some engineers ... i.e. people that solve problems in complex organizations ... instead of a bunch of lawyers and Joe-the-Plumbers?
Business Plan! Business Plan! Business Plan!
It's about time the government gets it. These are HIGHLY paid CEOs. It's time to stop rewarding the failures of these companies. They wento Harvard, Yale, wherever--the best business schools in the country. They need to present a Business Plan that WORKS! Before they are handed any money. Otherwise the government is just paying these CEOs to delay the inevitable so that they can make a couple of more millions dollars to do nothing but make bad decisions..
Don't bail them out. Force them to file for Chapter 11 Bankruptcy protection. Force them to reeavaluate how they operate and make necessary adjustments.
The UAW President said the government HAD to bail the Big three out or millions would be out of work. Sounds like a veiled threat of a strike by the UAW. I bet if they go on strike, there would be thousands of people lined up to take those jobs at significantly reduced wages which would be a good start to the restructuring of the Big 3.
All the demands put forth by the legislative branch seem to be chapter 11 bankruptcy without the courts control. Why not let them go Ch 11 and get restructured with the courts being the watchdog. I have more faith in the judicial branch than the elected branch when it comes to something like this
Hey CNN what happened to fact check???????? Was it just for the elections?? Bring it back!!!!
All I hear is NO! to the bail out. I guess Congress still doesn't listen to the peopel.
The Democrats(Obama) will bail out the unions because they bought him with their huge "donations" to his candidacy for president.Change ,what a joke,we've been more than had.
The requirements are clear, the only thing I would have included is that they need to sell their fuel guzzling, multi-million dollar, private jets and use that money to help their companies.
I can't even get to reading the "leader" or studying the "deails" of the demands because my mind can't get past the fact that CNN can't bother to proof-read their articles before posting them. Not to mention that it has been up for hours now and still is not fixed....? Come ON now.
If you want to fix the problem get rid of the excessive union salaries. Of course the democrats won't do this since they're bought and sold by big labor. Every state should be a right to work state.
I don't think there is any doubt whether the Democrats(Obama) will bail out the unions, because they bought him with their " huge donations" to his candidacy for president.Change ,what a joke,the whole thing is and has been a lie,we've been more than had.
Are Pelosi and Reid really looking to help or are they really looking for handouts? For themselves, obviously!
The demands set forth in the letter don't go nearly far enough. They need to go leaps and bounds beyond the current fuel efficiency targets. They need to be revolutionary, not evolutionary.
Further, Moe, Larry, and Curly need to be fired. For them to show up as arrogant as they were with their 3 separate jets show us that they don't have a clue. The auto company leadership is what got them to such a pathetic state in the first place. They need new blood.
The whole mess smells like we're about to reward bad behavior and the lack of both innovation and business sense. Only problem is, if the Big 3 go down, a lot of others go down with it.
No matter what, I want to see the paychecks of senior management cut 3/4 and bonuses paid WHEN GOALS ARE ACHIEVED. Take a look at Japan Airlines CEO – he reduced his pay to below the pilots and to respect workers his age forced into early retirement. That's honorable. American CEOs? Despicable!
This letter is essentially seeking what Chapter 11 would call a Plan of Reorganization. Chapter 11 permits management to put such a plan together and it would permit the auto companies that chose this path to review all of its contractual obligations - pension, health care, suppliers, dealership - and renegotiate them to fit what a reorganized company could achieve. Government funds would, in essence, become the financing mechanism as any large company in Chapter 11 must have. The other implication of Chaper 11 is that it can take a longer term view which this case is going to require under the best of circumstances. Do it right the first time.
Any short-viewed "bailout" is going to simply be the first of several. Remember the failed S&L's in the late 1980s? How many times did Congress have to keep adding money to the till?
dave said "Anyone who complains about union labor costs without bringing up CEO pay being 50-100 times union labor pay is willfully ignorant."
dave: Most people are saying both union greed and executive greed are at fault.
Will some one please Tell Nancy Pelosi to shut up before she and George Bush run this country any further aground. Given 2 weeks and enough performance data I could craft an overly convincing plan that would have congress offering $50 Billion instead of $25B. It does not take a Harvard education to put a convincing face on greed and sell it to a group of idiots who think "the big three" will abide by their written words. The check was written before Americans were invited onto the ride. This circus is simply a way to exempt everyone involved from being charged with theft later on.
why the full bill? i don't have a problem with a viable company paying its workers a living wage ($30/hr.; if the ceo and upper management are in the $250k range (i understand completely what we pay our nation's president, albeit an auto exec or any exec seeking bailouts, is far more demanding than commander in chief) if the ceo's of auto(nomy) can present some form of radically different directions – with huge cuts in corporate perks and compensations; significant immediate fuel economy improvements; flex fuel/alternative mandates for 2010/11; significant quality improvements; then hold out a carrot and offer $10 billion (i mean it's only a month of a war in iraq...) and let's see these potzers walk the walk... if not let them sink... if they manage then we'll see... but the taxpayer reaps rewards on our investments before these ceo's and boards...