Posted tagged ‘Auto Bailout’

Auto Bailout Deal Reached…Maybe…

December 10, 2008

According to congressional officials, Democrats in the Congress and the White House have finally finalized a deal to spend $15 billion on emergency loans for struggling U.S. automakers.

From the Associated Press:

The White House did not go quite so far, saying it has made “very good progress.” The measure could see a House vote later Wednesday and be enacted by week’s end.

It would create a government “car czar” to dole out the loans, with the power to force the carmakers into bankruptcy if they didn’t cut quick deals with labor unions, creditors and others to restructure their businesses and become viable.

Congressional Republicans, left out of negotiations on the package, are expressing grave reservations and may seek to block it.

Sen. David Vitter, R-La., promised to filibuster the measure, which could delay a final vote for days.

He said the package has an “ass-backwards” approach to curing what ails the U.S. auto industry.

Nevertheless, Democratic leaders were confident enough that a bill could advance that they set a procedural vote for the House floor later Wednesday. Even still, Sen. Mitch McConnell, the GOP leader, said in late morning that his side hadn’t seen the measure yet and wouldn’t agree to votes on the measure Wednesday.

“Republicans will not allow taxpayers to subsidize failure,” McConnell said, although he added that the auto situation would be addressed by the end of the week.

The congressional officials revealed agreement on a bill only on grounds of anonymity because the deal has not been formally announced.

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Congress Agrees on Auto Bailout Plan

December 5, 2008

Democratic Congressional leaders said late today that they were ready to provide a short-term rescue plan for the American automakers, and they expect to hold votes on the legislation during a special session next week.

From the New York Times:

Details of the rescue package were not immediately available but senior Congressional aides said that it would include billions of dollars in short-term loans to keep the automakers afloat at least until President-elect Barack Obama takes office.

Ending a weeks-long stalemate between the Bush administration and House Speaker Nancy Pelosi, senior aides said that the money would likely come from $25 billion in federally subsidized loans intended for developing advanced fuel efficient cars.

Ms. Pelosi had resisted using that money, which was approved as part of an energy bill last year, and Democrats had called repeatedly on the Bush administration or the Federal Reserve to act unilaterally, using existing authority, to aid the auto companies.

On Friday, Ms. Pelosi said that she would allow that money to be used provided “there is a guarantee that those funds will be replenished in a matter of weeks” and that there was no delay in working toward higher fuel-efficiency.

Word of a breakthrough came as Congress wrapped up two days of hearings at which lawmakers grilled the chief executives of the companies, Chrysler, Ford and General Motors, and experts warned that GM could collapse by the end of this month.

Ford Says CEO Will Work for $1

December 2, 2008

And he will be giving me the rest of his salary 🙂 I can dream, right?

Ford Motor Co. CEO Alan Mulally said he’ll work for $1 per year if the automaker has to take any government loan money.

From the Associated Press:

The plan Ford is presenting to Congress this week also says it will cancel all management employees’ 2009 bonuses and will not pay any merit increases for its North American salaried employees next year.

Other cost-cutting actions include a plan to sell Ford’s five corporate aircraft, the company said.

Mulally said in an interview with The Associated Press on Tuesday that Ford will emphasize its cost cutting efforts with the United Auto Workers union and will give much more detail to Congress than it did when lawmakers grilled the automakers’ CEOs earlier this month.

The company said it also will accelerate plans to roll out electric vehicles as part of the plan it will present to Congress this week. The vehicles will come out starting in 2010 and include the Transit Connect small van and a car the size of the Ford Focus compact.

Mulally says Ford will seek $9 billion in government loans but may not need them. The Dearborn-based has said it has enough cash to make it through 2009 without assistance.

All three Detroit automakers are scheduled to appear before congressional committees Thursday and Friday to seek a total of $25 billion in government loans. Chrysler LLC and General Motors Corp. have said they are perilously low on cash and need the government loans to survive the recession and the worst auto sales environment in 25 years.

Mulally also said he will encourage other automakers to join forces to develop new battery technologies in the U.S. for future electric cars.

An electric car and profitability are hallmarks of a plan Ford submitted to Congress Tuesday.

Ford’s plans call for an investment of up to $14 billion to improve fuel efficiency over the next seven years. The company said would improve the overall efficiency of its fleet by an average of 14 percent in 2009.

The company’s plans to achieve profitability or break even by 2011 are based on industrywide sales estimates of 12.5 million units in 2009, 14.5 million in 2010 and 15.5 million in 2011.

Auto Industry CEOs Flew Private Jets to Ask for Bailout Money

November 20, 2008

Lawmakers are lashing out at the CEOs of General Motors, Ford and Chrysler today for flying private jets to Washington to request taxpayer bailout money. Seriously. Do executives even think before they do things? It’s like calling the kettle black. And you think you deserve the money?

From CNN:

“There is a delicious irony in seeing private luxury jets flying into Washington, D.C., and people coming off of them with tin cups in their hand, saying that they’re going to be trimming down and streamlining their businesses,” Rep. Gary Ackerman, D-New York, told the chief executive officers of Ford, Chrysler and General Motors at a hearing of the House Financial Services Committee.

“It’s almost like seeing a guy show up at the soup kitchen in high hat and tuxedo. It kind of makes you a little bit suspicious.”

He added, “couldn’t you all have downgraded to first class or jet-pooled or something to get here? It would have at least sent a message that you do get it.”

The executives — Alan Mulally of Ford, Robert Nardelli of Chrysler and Richard Wagoner of GM — were seeking support for a $25 billion loan package. Later Wednesday, Senate Majority Leader Harry Reid reversed plans to hold a test vote on the measure.

An aide told CNN that Reid decided to cancel the test vote when it became clear the measure would fall well short of the 60 votes needed. Reid did, however, make a procedural move that could allow a vote on a compromise, which several senators from auto-producing states were feverishly trying to craft.

At Wednesday’s hearing, Rep. Brad Sherman, D-California, pressed the private-jet issue, asking the three CEOs to “raise their hand if they flew here commercial.”

“Let the record show, no hands went up,” Sherman said. “Second, I’m going to ask you to raise your hand if you are planning to sell your jet in place now and fly back commercial. Let the record show, no hands went up.”

The executives did not specifically respond to those remarks. In their testimony, they said they are streamlining business operations in general.