Reuters reported late Tuesday night that the White House and congressional Democrats had reached an "agreement in principle" on a $15 billion proposal for bailing out the Detroit Three and forcing them to restructure or fail.
Democrats have arranged to have the House of Representatives vote on a bill as early as Wednesday and send it to the Senate.
We will post on all this at-length after the necessary votes are held and it's clear what's in the bill, but we do have a few key points to report, again, supplied by Reuters (as you might imagine, I really want to comment on all of this, but brevity forbids it; also, we're not accepting comments, so we can all wait until after the votes or more info is available):
- The money, in the form of direct, low-interest loans, will come from a $25 billion Energy Department fund originally established to help Detroit make more fuel-efficient cars (the fund will then be worth just $10 billion);
- Deal-killer? The administration still opposes a Democratic bid to force automakers to drop lawsuits against California and other states seeking to cut auto emissions and other greenhouse gases. The administration official said it was his expectation the bill will not succeed unless that provision is struck;
- President Bush will appoint an overseer, the so-called Car Czar;
- The overseer will have powers to shape a restructuring of the companies, withholding further loans if progress toward a turnaround stalls;
- A major provision would permit the czar to "recommend" a bankruptcy restructuring if companies borrowing money fail to obtain the necessary concessions.
Some Republicans wanted a bankruptcy option included as an incentive for labor and other stakeholders to agree on givebacks.
Another issue raised by Republicans was the use of taxpayer money in the case of Chrysler, which is owned by private equity firm Cerberus. Democratic aides said the administration resisted a bid to hold Cerberus liable for repayment if Chrysler defaulted on any loan.
A spokesman for Senate Minority Leader Mitch McConnell, a Kentucky Republican, said he would decline comment until he saw the bill.
For once, we agree with McConnell. We've also, almost shockingly, agreed with Alabama Sen. Richard Shelby once or twice recently, too, especially for his warning that this $15 billion is just the "down payment" on the amounts of cash Detroit really needs, and they may all fail, anyway.
Once the votes are taken, yea or nay, we'll post our thoughts on these critical events effecting the industry in which I've spent my working life as a journalist.
As always, we'll want to know what you think, too. And, especially, what you think will happen next, after the votes.