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Senate Rejects Auto Bailout Bill, Ignores GM’s Desperate Pleas

Posted in auto industry, Cars, Chrysler, Detroit, Ford, GM, Newsworthy, Politics by Suzanne Denbow | November 18th, 2008 | Leave a Reply |

GM CEO Rick at a press conference at GM World Headquarters in Detroit, Michigan. (Photo by Bill Pugliano/Getty Images)

Apparently choosing to continue the charade of a free market economy at least until January when President-elect Obama formally takes office, Congress has prematurely rejected a bill that would provide a portion of the already-existing $700b Wall Street bailout to domestic automakers. Surprisingly enough, especially given the widespread public criticism the Bush administration has drawn and the equally overwhelming adoration the Obama camp as received, lawmakers on Capitol Hill cite Bush’s heavy disfavor of the proposed auto bailout as the reason for its failure. “[The auto bailout] doesn’t have enough votes to pass,” explained Sen. Max Baucus, D-MT. “I think there’s too much opposition from the administration.” Despite President-elect Obama’s repeated assurances that any loan provided to the auto industry would come with very stringent “preconditions”, the Bush Administration has been largely unimpressed by the clever use of ambiguous promises and remains adamantly opposed to the measures as they stand.

Although lawmakers and beneficiaries of the bill were hopeful a favorable verdict would be delivered as early as Monday, lack of Congressional support has delayed official voting until at least Thursday. The official terms of the bailout agreement will not be fully disclosed until a final draft is formally legislated, but the bill’s preliminary guidelines have already been released to the public. Accordingly: $25 billion of the $700 billion currently allocated to Wall Street lenders would be exclusively reserved for use by U.S. automakers. While the federal aid will not explicitly be limited to the Detroit 3, only those automakers who have operated at least two production facilities within the U.S. unceasingly for the past 25 years will be eligible to revive a portion of the loan. Assuming they meet the initial criteria, every automaker who receives federal assistant will be required to provide the U.S. Treasury with full documentation indicating how each dollar was spent, and will be strictly forbade from using the government loan to fund “golden parachutes” or satisfy shareholders’ dividends.

Currently, sources indicate that the Senate could conduct a “test vote” as early as Wednesday, but an official ruling on the matter is not expected to surface until Thursday.

Source: Detroit Free Press & Auto News

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