In direct opposition to the statements Sen. Carl Levin’s (D-Mich.) made yesterday on Fox News Sunday, more recent reports suggest that Congress may approve a larger rescue package for the Detroit 3. Speculations have run rampant since the Senate hearings first convened to decide on the fate of the domestic auto industry, with “official” numbers ranging anywhere from $35 to $15 billion. As Congress appears to be drawing closer to an official decision, however, it appears as though the final dollar amount will differ by only a mere billion from the $25 billion initially requested in October.
Albeit reluctantly on Washington’s part, it certainly appears as though Detroit will receive everything they asked for this Christmas. Though unlike the golden tickets doled out to Wall Street a few months ago, Detroit’s bailout will come with more strings attached to it than a Macy’s parade balloon (yes, I went there).
While the officials details are still hazy, some of the preliminary stipulations lawmakers are expected to place on the bailout include:
- Require loan recipients to defer to government-appointed “car czar”
- Order automakers who fail to meet loan requirements to formally file for bankruptcy
- Require Chrysler and GM to merge
- Eliminate UAW Jobs Bank
- Prohibit automakers from contesting individual states’ environmental standards (specifically, order Detroit to drop their ongoing lawsuit against California’s emissions regulations)
- Force bondholders to accept debt-for-equity exchange
Attempting to justify Congress’ ridiculously hard-line stance, Senate Banking Committee Chairman Christopher Dodd (D-Conn.) explained, “We’re not going to write a check for any amount of money without serious conditionality associated with it.” What he left unsaid: “…unless of course said check is made payable to Wall Street, in which case – hell! We’d even leave it blank!”
Source: Auto News