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Thread: Nancy Pelosi tells automakers they need to come up with a plan in order to get money

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    Elite Member Belinda's Avatar
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    Default Nancy Pelosi tells automakers they need to come up with a plan in order to get money

    Democratic leaders in Congress sidetracked legislation to bail out the auto industry Thursday and demanded the Big Three develop a plan assuring the money would make them economically viable. "Until they show us the plan, we cannot show them the money," Speaker Nancy Pelosi, D-Calif., said at a hastily called news conference in the Capitol.

    She and Senate Majority Leader Harry Reid, D-Nev., said Congress would return to work in early December to vote on legislation if General Motors Corp., Ford Motor Co. and Chrysler LLC produce an acceptable plan. The decision averted a likely defeat of legislation providing $25 billion loans for the industry. Reid and Pelosi said there was no plan in circulation that could pass both houses of Congress and win President George W. Bush's approval.

    While the decision headed off the defeat of one bill, it did not necessarily translate into passage of a different one.

    As a result, the fate of hundreds of thousands of auto workers and even of an iconic American industry hang in the balance.

    The chief executives of the Big Three automakers appealed personally to lawmakers for the loans this week, and warned that their industry might collapse without them. In testimony, they said their problem was that credit was unavailable, and not that they were manufacturing products that consumers had turned their backs on.

    But whatever support they found sagged when it became known that each of them had flown into Washington aboard multimillion dollar corporate jets. Reid observed that was "difficult to explain" to taxpayers in his hometown of Searchlight, Nev.

    The automakers are on a tight timeline. Reid and Pelosi said their plan must be turned over to key lawmakers by Dec. 2 They said hearings were possible the first week of December, and Congress may return to session the following week to consider legislation.

    Pelosi stressed that whatever the Big Three provided to Congress, it must show they had a plan for "viability and accountability," meaning that the were transforming their industry in a way that it would become competitive, and that they were clear about how the federal loan money was used. Even if lawmakers return to vote, they are likely to insist on numerous conditions on any loans. One possibility is to seek a partial ownership of the companies. Another is to limit salaries of top executives. A third is to prohibit use of the funds for any lobbying.

    Until Democratic leaders reached their agreement, the bailout had appeared headed for defeat in Congress, with the fate of hundreds of thousands of workers and Detroit's once-venerable car companies in the balance.

    Reid canceled plans for a vote on a bill to carve $25 billion in new loans out of the $700 billion Wall Street rescue fund. The Bush administration and congressional Republicans oppose that plan. They prefer tapping a different source of funds that is earmarked to help the industry produce vehicles that burn less gasoline. But using those funds drew opposition from Pelosi, as well as environmentalists.

    Efforts on a compromise unfolded earlier in the day, and a small group of legislators circulated a proposal that would divert the fuel-efficiency money to cover the industry's short-term financial needs, while guaranteeing that account would ultimately be replenished.
    With all sides sensing doom for a Big Three automaker rescue, the finger-pointing proceeded.

    White House press secretary Dana Perino on Thursday blamed Reid for not allowing the Republicans' separate auto-aid plan to come up for a vote. "Unfortunately it looks like Sen. Reid just wants to pick up his ball and go home for the next two weeks _ two months _ for vacation," she said.
    Pressed on what the White House would do if Congress can't agree on a plan to rescue the automakers this week, Perino said she thought lawmakers would return after the Thanksgiving holiday for an emergency legislative session if an auto company was in imminent danger of collapsing. "I can't imagine a scenario where they wouldn't come back, unless the answer is that they just don't care. And if that's the case, then the American people ought to know that."

    Congressional Democrats countered that the Treasury Department already had the power to grant emergency funds to the automakers, but the Bush administration opposed the approach.

    The leaders of the Big Three automakers painted a grim picture of their financial position during two days of congressional hearings, warning that the collapse of the auto industry could lead to the loss of 3 million jobs. Detroit's automakers, hurt by a sharp drop in sales and a nearly frozen credit market, burned through nearly $18 billion in cash reserves during the last quarter _ about $7 billion at GM, almost $8 billion at Ford and $3 billion at Chrysler. GM and Chrysler said they could collapse in weeks.

    "I don't believe we have the luxury of a lot of time," GM CEO Rick Wagoner told a House hearing. Alan Mulally, the CEO of Ford Motor Co., said the company had enough cash reserves to make it through 2009. But United Auto Workers union president Ron Gettelfinger said a bankruptcy could spawn others.

    "If there's a Chapter 11 (for) one of the companies, it will drag at least one other with them, if not all of them. And I do not believe Chapter 11 is where it will end. It will go to liquidation," Gettelfinger said.

    Automakers ran into more resistance from House lawmakers, who chastised the executives for fighting tougher fuel-efficiency standards in the past and questioned their use of private jets while at the same time seeking government handouts.

    "My fear is that you're going to take this money and continue the same stupid decisions you've made for 25 years," said Rep. Michael Capuano, D-Mass.

    The stakes are high. The Detroit automakers employ nearly a quarter-million workers, and more than 730,000 other workers produce materials and parts that go into cars. About 1 million more people work in dealerships nationwide. If just one of the automakers declared bankruptcy, some estimates put U.S. job losses next year as high as 2.5 million.

    Dems are postponing crucial vote on auto bailout

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    Elite Member Grimmlok's Avatar
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    1) Pelosi showing leadership and making sense? wow.

    2) How long till pelosi and reid cave after being called a bad name?

    3) They expected a handout with no plan to modernize their product line?

    4) They didn't think their private luxury jets were extravagant?
    I am from the American CIA and I have a radio in my head. I am going to kill you.

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    Elite Member KristiB's Avatar
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    I think they should ask the oil industry for a bailout.

    After all, they keep make gas guzzlers and the oil companies keep making record breaking profits.

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    Elite Member kingcap72's Avatar
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    Quote Originally Posted by KristiB View Post
    I think they should ask the oil industry for a bailout.

    After all, they keep make gas guzzlers and the oil companies keep making record breaking profits.
    Exactly. They keep making gas guzzling cars, so let the oil companies foot the bill.

    I mean, the fact that the CEOs showed up in private jets, asking for a taxpayer bailout, shows how stupid they are.

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    Elite Member Grimmlok's Avatar
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    I loved the footage on CNN...

    "Raise your hands if you are willing to sell your private luxury jets and fly back commercial to detroit? Please note for the record that no hands were raised."
    I am from the American CIA and I have a radio in my head. I am going to kill you.

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    Elite Member McJag's Avatar
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    Wonder what "plan" they manage to come up with by Dec. 4th. They are almost stupid enough to be honest & go on about golden parachutes.
    I didn't start out to collect diamonds, but somehow they just kept piling up.-Mae West

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