Government Insists On Oversight In New Auto Rescue Plan

UPDATE on 12/07 at 11:30PM: And the New York Times highlights that Democrats are pushing for stronger federal control and oversight of the auto industry, pointing out that the Bush-Obama transition is complicating the discussions:

Congressional Democrats on Sunday were weighing options for tight government control of the crippled American auto industry, including the possible creation of an oversight board made up of five cabinet secretaries and the head of the Environmental Protection Agency, and led by an independent chairman or "car czar."

While the form of oversight was still being negotiated by Congressional Democrats and the White House late Sunday, the talks made clear the extent to which the auto companies would have to submit to substantial government supervision in order to receive a taxpayer-financed bailout.

Whatever oversight entity is created, it would direct the drastic reorganization plans that the auto companies have said they were willing to undertake in exchange for billions of dollars in short-term government loans to keep them in business, according to a senior Congressional aide. A main factor complicating the deliberations was the imminent transition between the Bush and Obama administrations.

UPDATE on 12/07 at 11:22PM: The Washington Post adds that part of the plan could include forcing GM, Chrysler and Ford to oust their top executives:

Congressional Democrats are drafting legislation that would give the teetering Detroit automakers at least $15 billion in emergency loans early next week and grant the federal government broad authority to manage a massive restructuring of their operations.

The proposal, which could be put to a vote in Congress as soon as tomorrow, would establish a seven-member "auto board" of Cabinet officials and a chairman to be appointed by President Bush to oversee both the short-term loans and a long-term effort to restore the faltering industry to profitability. If the companies take the cash, they would be accountable to the government for nearly every move, and for every transaction of $25 million or more.

As part of that restructuring, General Motors, Chrysler and Ford could be asked to jettison their top executives, one of the chief architects of the plan, Senate Banking Committee Chairman Christopher J. Dodd (D-Conn.), said yesterday. Stating bluntly that "GM is in the worst shape" of the three auto giants, Dodd said that GM chairman G. Richard Wagoner Jr., the company's chief since 2000, "has to move on."

Throughout the weekend, Congressional negotiators and their White House counterparts tried to iron out their differences and reach an agreement on the specifics of a plan to bail out the Big Three of the automotive industry:

Reuters reports:

White House and congressional negotiators sought on Sunday to remove remaining differences over an emergency rescue for the struggling auto industry, a stark symbol of the deepening U.S. economic crisis.

Prodded by shock unemployment figures which showed the country shed more than half a million jobs in November alone, negotiators tried to forge an agreement in principle to provide "The Big Three" American automakers with at least $15 billion in short-term loans.

The Senate is due back in session on Monday and negotiators hope to have a package ready that can be quickly approved and sent to President George W. Bush as one of the last measures he signs into law before Democrat Barack Obama succeeds him as president on January 20.

Comments

[sueinmn]

Subject: Ford, GM & Chrysler


Ford, GM & Chrysler



This is interesting..... Well worth a read -
Ford, Chrysler and GM's contributions
After 9/11 an interesting commentary...

1. Ford - $10 million to American Red Cross matching employee
contributions of the same number plus 10 Excursions to NY Fire Dept. The
company also offered ER response team services and office space to
displaced government employees.

2. GM - $10 million to American Red Cross matching employee contributions
of the same number and a fleet of vans, suv's, and trucks.

3. Daimler Chrysler - $10 million to support of the children and victims
of the Sept. 11 attack.

4. Harley Davidson motorcycles - $1 million and 30 new motorcycles to the
New York Police Dept.

5. Volkswagen - Employees and management created a Sept
11 Foundation, funded initial with $2 million, for the assistance of the
children and victims of the WTC.

6. Hyundai - $300,000 to the American Red Cross.

7. Audi - see VW

8. BMW - Nothing.

9. Daewoo - Nothing.

10. Fiat - Nothing.

11. Honda - Nothing despite boasting of second best sales month ever in
August 2001

12. Isuzu - Nothing.

13. Mitsubishi - Nothing.

14. Nissan - Nothing.

15. Porsche - Nothing. Press release with condolences via the Porsche
website.

16. Subaru - Nothing.

17. Suzuki - Nothing.

18. Toyota - Nothing despite claims of high sales in July and August 2001.
Condolences posted on the website
the foreign car companies contributed
nothing at

[robophoto]

Get Exxon to bailout car companys. They have a ton of profit. They`ve been in bed together forever anyway.

[research]

That's easy: raise the royalties Exxon pays on drilling in public land.

[FreedomAgain]

Where are the fuel cell cars? (just asking)

[orangepetal]

Are all the angry anti oil people the same as those who complain about manufacturing jobs going overseas? Sure, we can let foreign companies buy them out, but can we ask for their allegiance? Once the companies close, they are gone forever. All the car companies in the world are having a hard time and are seeking and receiving help. Why should ours be the only ones to fall. If we do not love, protect and care for America nobody will. We just survived a President who catered to the whims of the mighty, it seems those days could be over. Let's hope so.

[OldKnute]

Orangepetal,

Right you are. If 750 Billion can"t budge Banking Credit Crunch that Wagner blames the GM woes on what is this other, "Auto" Bush Bailout supposed to do for the Big Three?

Bush Deficit Economics has failed, Greenspan says so, the Big Three say so, and the Bailouts haven"t worked as we see by Manufacturing and Employment statistics.

Now, after a YEAR of formally being in a recession,,, lied to by the Bush Administration we are supposed to jump onboard with all these Emergencies??????

Crisis Management?,,, Or Management by Crisis?

Let"s face it,,,, NOT one thing will work until NEW Leadership is in the White House and that doesn"t happen until Jan, 20, 2009. Anything short of that will just be blaming Obama for Bush Failings, AND Obama has still not taken office.

Now Bush expects us all to sit still as the Big Three come begging? Taxpayers must make the sacrifices under Bush Bailouts? Always? The same Big Three that have opposed every attempt to move them toward more fuel efficiencies.

Please remember. Bush is the man that told California they got what they "Voted For" in deregulation, ALL while Enron was perpetrating financial rape of the Consumers and Utilities in California.

Bush Emergency Bailouts are not working.

These days are over? I hope so too.

All the best

Knute

[LiarLiarIraqsOnFire]

Why oversee the Auto Industry if they won't oversee the Financial Industry?

[katok]

"Badges?...Badges?...We don't need no stink'in badges". They can't end the "Three card monte" game on Wall Street, but they'll surely manage line workers. They respond to intimidation.

[kors8858]

Let them fall. Give assistance to small fledgling companies that are willing to do away with Big Oil altogether. Has Congress asked these 3 companies as to what their relationship with Big Oil is? If they say "nothing", then why not ask "why all these gas guzzlers?" Why haven't they been at the forefront of total oil independence? Why? Let them fall with their Saudi-Texas (Bush-ladin) buddies. Make all cars hybrid solar, electric, hydrogen, bio diesel, foot fungus. Anything, as long as we're off the oil. All these jobs that we'd be "losing" would be gained right back to the new companies. For all the fans of minutiae, details can be worked out later. The big picture was Change. Is Change. Not a better version of the same. If at the end of Obama's legacy we're left with 50mpg cars, instead of complete independence, I will completely give up on hope with this country.

[firesideone]

Let me take a shot at answers for you:

1) All the gas guzzlers because that is what people were buying.
2) Not at the forefront of oil independence because people are not willing to pay a non-subsidized cost for an alternative or next generation fuel efficient vehicle, and the current administration wanted nothing to do with either.

I agree with your vision for the future - 50mpg cars and alternative energy. Well, maybe not foot fungus. My question is how to get there sooner - by working with american manufacturing to jointly create the vision, or relying on foreign industry and having to take whatever they ship to us.

I've witnessed amazing accomplishments when government and industry work together. I'd like to witness this one too.

[kors8858]

Banks usually don't lend money to failing companies. To them this is "good money chasing after bad" and is very unwise. These are institutions that are second only to casinos when it comes to risk and odds of success. I think the government, which has already leveraged this country dangerously, needs to take a back seat (pardon the pun) and not be given the opportunity to abuse (or mismanage) more funds. Let the entrepreneurs of this country (not foreign industry) lead the way... I blame the three major companies more than the consumer for our gas guzzler addictions. Demand was driven by them, since profits on SUVs are greater than sedans and coupes. I, myself, witnessed a dealer push an SUV down my throat, unsuccessfully. The magic word now is "crossover". We ended up with a Versa hatchback, but was very upset at the way these wolves push their tanks on us. I say give Tesla motors (or the like) 15 billion instead of them and see what they can do...

[CharlesJ]

I would like to ask this.
Who is going to oversee our congressional and senatorial leadership, that has failed to insist on checks and balances for those financial institutions that have received federal and taxpayer bail out money? The banks keep getting bigger by purchasing struggling banks, and other financial institutions with the money they were supose to pump back into the economy, all the while business throughout the US are failing, shuttering their windows and doors and hundreds of thousands of Americans are seeing their jobs go away as well as their pensions and medical insurance.

I personally believe that all these banks should have their notes called NOW on every penny of federal assistance and bail out they have received. When that money is collected the fed should step in take control of those banks just like they are doing with the big three, then sell them off to AMERICAN investors.
With all that money then the fed should bail out the American taxpayers. They should have by this time collected enough money to give us one heck of a large bail out.

[rf-hawaii]

Republicans: Let them fail !

Democrats: Get some smart people involved and see if we can save them. After all they're 10% of the economy.

Complete and total hands-off, deregulation seldom makes sense. Especially in a crisis.

[firesideone]

Don't forget to add "And blame the democrats for everything" to the republican response!

[killpack]

killpack (who is neither Democrats nor Republican): Let them fail!

MAJORITY of Americans: Let them fail!

I belong to the anti-Congress party.

[Photofarm]

Government oversite of business doesn't work. Just look at what the cafe standards did to the car industry. Look at how AMTRACK loses money constantly, and now Democrats in Congress, after failing with Fanie Mae and Freddie Mac think they can improve the auto industry. Only a total fool would believe the Democrats in Washington DC

[Totto]

"Amtrak", "Fannie Mae". Ever hear of Airbus, SNCF (300 mph trains)?

[firesideone]

Potentially good argument, but bad examples.

Bush all but eliminated cafe standards until oil prices starting to shoot up and it became politically expedient for him to get back on the band wagon.

We'd have no passenger rail system without Amtrak. Washington would love to turn over Amtrak to private enterprise.

FMAE and FMAC were run as private corporations.

[grey32]

This is like a really, really bad movie. Except how it ends does matter..

[orangepetal]

yup

[LAThinker]

Get rid of those executives first

http://www.ucubd.com/Index.aspx?id=974&cid=D010900

[Arthur954]

They should be doing the same thing for the financial bailout !!! WALL STREET is a BLACK HOLE with no end in sight ... at least Detroit is producing things that we can touch and use

LET´S SUPPORT OUR MANUFACTURING BASE IN ONE WAY OR ANOTHER. Someone posted recently that in 1980 , manufacturing was 30% of GDP. Now it is 9% Where do we go from here ?

The only way to have a stable solid economy is to have manufacturing and exports. Right now our main export to the rest of the world seems to be financial problems

[VikingQuest]

Sure is comforting that Congress will be doing the oversight . . . they can't even run a cafeteria withoug bankrupting it . . . which they have already done.

[beerguy]

Many here are missing the forrest through the trees. If congress takes over the domestic car industry, than you can kiss the car industry in this country good bye. These are the same clowns who ran fannie mae and freddie mac. Look where that got us. Honestly, why do people seem to believe that congress can fix things when it is obvious these people spend and waste more money than anyone can imagine. Wake up people!

[GoodGuysandBadGuys]

"If congress takes over the domestic car industry, than you can kiss the car industry in this country good bye."

and if they don't take it over, you can kiss it goodbye.

[beerguy]

No. If they go into bankruptcy, they will be restructured and one, possibly two stronger companies emerge. If the government runs them, they will put even more mandates on vehicles and less people will buy them.

[firesideone]

Correction - congress did not run FMAE and FMAC. As a GSE, they were created through an act of congress, but they were privately owned until being brought under the feds wing after becoming insolvent.

[chicago25624]

So why aren't they calling for the resignation of the UAW President?

[In A World]

Maybe you should go read an absorb information about the UAW (and the history of Unions in general) and their current role in this, before trying to blame them. Guess what, brainiac: the UAW doesn't make policy decisions about which cars the company builds.

Unions are democracy in the workplace and have made such enormous positive contributions to this country.

The Corporatocracy and these thuggish CEOs who pull down multimillion dollar bonuses are a poison, and they need to get the boot!

[Rumplestiltskin]

"the UAW doesn't make policy decisions about which cars the company builds"

In a way they do because workers can't be displaced by robots, or more efficient production, and new lines must not result in loss of union jobs. Read a few articles about what people "guess" about the UAW "jobs bank", and how it effects the automobile makers.

[MTOrtega]

Let's re-brand the car manufacturing industry to the "Transportation Industry."

The 21st Century new and re-imagined Transportation Industry should focus on;
- Superior quality.
- Non-toxic, zero-emission, environmentally compatible fuel technology
- High mileage (per transportation medium - trains, planes, autos, mini-vans, trucks, buses, etc.).
- 50 year usable life.
- Useable life guarantee.
- Low carbon mfg. footprint.
- Elimination of large SUV offerings.
- Trucks sold only for commercial use.

[tre]

"- Elimination of large SUV offerings.
- Trucks sold only for commercial use"

What, then, will the man who wants to tow his RV, or his boat, or other type of trailer do? I figure they should focus on designing and building cars people want, not what the Government tells them to build.