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Congress Approves $25B Bailout For U.S. Automakers

Posted in auto industry, Chrysler, Detroit, Ford, GM, Newsworthy, Politics by Suzanne Denbow | November 12th, 2008 | Leave a Reply |

Photo by Susan Walsh/Associated Press From left, Ford President and CEO Alan Mullally, GM CEO Richard Wagoner, Jr., Chrysler Chairman and CEO Robert L. Nardelli, UAW President Ron Gettelfinger, and Speaker of the House Nancy Pelosi, D-Calif.; Capitol Hill, Thursday, Nov. 6, 2008.

On Tuesday, Speaker of the House Nancy Pelosi announced that in the likely event that Congress approves a $25 billion dollar bailout for the auto industry, it will come with considerably more stipulations then were attached to the loans extended to Wall Street in October. Although the Bush Administration is still refusing to approve an executive orders that would disperse emergency funds to domestic automakers, Detroit need only bide its time for 2 short months before inside sources say a bailout bill is all but guaranteed them. Official legislation has yet to be drafted and public support for the apparently pending federal prop for Detroit is at an underwhelming 20%, Nancy Pelosi has reportedly already requested Rep. Barney Frank (D-Mass.) to begin drafting an amendment to the $700 billion dollar Wall Street bailout that would guarantee $25 billion of those funds specifically for use by Chrysler, Ford, and GM. Treading significantly lighter on concerned taxpayers than last month, Pelosi made it clear that any government loans provided to the Big U.S. 3 would not be done so without stringent requirements for eligibility.

Among the terms of disbursement, limitations would be placed on how much of the federal funding could be used for executive pay and use of the loan money for “golden parachutes” would be explicitly prohibited. In addition, Pelosi also said that automakers would be required to maintain their promises of providing more fuel-efficient vehicles. Said Pelosi, “It is essential for the domestic automobile manufacturing industry to reemerge as a global, competitive leader in fuel efficiency and in new, path-breaking energy-efficient technologies that protect our environment.”

When reached for comment, GM said it “appreciates the speaker’s call for urgent action,” while Ford – whom already has taken a significant jump start in regaining its global authority – enthusiastically responded by saying that it would “work together with all of our nation’s leaders to continue our transformation to greater fuel efficiency and to help protect jobs.”

Source: Detroit Free Press

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