Pelosi to automakers: Bring it in writing
Posted: Friday, November 21, 2008 12:36 PM by Carrie Dann
Filed Under:
Congress, Economy
From NBC's Carrie Dann
They're on notice.
At her weekly press briefing this morning, House Speaker Nancy Pelosi reiterated a stern call to America's automakers to lay out a plan for their own survival in advance of a proposed lame duck session to take up the issue of federal aid to the industry.
"We have some problems because they keep changing the request," she said of automakers, who have ruffled Congressional feathers by appearing unenthusiastic about receiving funds earmarked for innovation rather than immediate assistance to promote liquidity. "We want it in writing. What is it that they want [the federal funds] for? We stand open to be helpful."
Video: House Speaker Nancy Pelosi says that the auto industry is an important part of the U.S. economy, but the Big Three need a plan to help return to viability and accountability, rather than just taking government money and continuing on.The Speaker of the House said that she and
Senate Majority Leader Harry Reid have drafted a letter to the CEOs of the big three automakers designed to "giv[e] them some idea of what we do mean by viability and accountability to the American taxpayer."
It remains to be seen how harshly worded the letter will be. Asked if the text specifically mentions the bad publicity earned by CEOs who traveled to Washington in corporate jets to register their complaints about impending financial doom, Pelosi merely smiled, saying that the critique in their directive to automakers is there "by implication."
Pelosi said that much hinges on how the automakers' proposal goes over among Congressional leaders, saying that she hopes they will lay out a map to success that "justifies calling another session of Congress" before next January. (Still, she added, "we can't do nothing," and underscored that -- even without additional Congressional action this year -- the existing administration has authority to make an infusion of cash to the industry at a moment's notice, if need be.)
"Their viability is not just about belt-tightening," she said of American manufacturers under fire for their sluggish efforts to advance auto technology. "It's about a decision to compete and innovate."
*** UPDATE *** Also, if you're following the Waxman fallout, Pelosi was asked today who would replace him on the oversight cmte as he ascends to Energy and Commerce. Pelosi said that she didn't forsee an impending fight.
"I don’t know that anything would be outside the regular order," she said. But she added this wait-and-see caveat: "We’re just getting used to the idea of what happened yesterday" with Waxman's victory.
Next in line for the chairmanship would be Rep. Edolphus Towns (D-N.Y.)
*** UPDATE TWO *** Here's the full text of the letter, released Friday afternoon.
November 21, 2008
Dear Messrs Wagoner, Mulally, and Nardelli:
We recognize the importance of the domestic automobile industry and are committed to working with you to ensure its viability in the years to come. One in 10 American jobs is related to auto manufacturing; our national security depends on the industry’s technologies and manufacturing capacity; and our competitiveness in a global economy depends on its pursuit of excellence.
As you know, Congress has provided President Bush, the Chairman of the Federal Reserve, and the Treasury Department the authority they need under the Emergency Economic Stabilization Act (EESA) as well as other authorities to provide short-term financial assistance to the auto companies.
Unfortunately, the Bush Administration and the Federal Reserve have thus far declined to use their powers to improve our nation’s financial stability by assisting the auto industry. Notwithstanding existing authorities, this Congress is prepared to consider additional legislation that would give the assistance you seek, provided that you submit a credible restructuring plan that results in a viable industry, with quality jobs, and economic opportunity for the 21st century while protecting taxpayer investments.
In order for Congress to act in a timely manner, this plan must be presented to Congress by December 2nd, specifically to Senate Banking Committee Chairman Christopher Dodd and Financial Services Committee Chairman Barney Frank.
It is critical that you meet this deadline since we have announced we are prepared to come back into session the week of December 8 to consider legislation to assist your industry. We intend to give pertinent agencies within the executive branch, the Government Accountability Office, the Board of Governors of the Federal Reserve, as well as outside experts, the opportunity to comment on your work.
The plan must:
Provide a forthright, documented assessment of the auto companies’ current operating cash position, short-term liquidity needs to continue operations as a going-concern, and how they will meet the financing needs associated with the plan to ensure the companies’ long-term viability as they retool for the future;
Provide varying estimates of the terms of the loan requested with varying assumptions including that of automobile sales at current rates, at slightly improved rates, and at worse rates;
Provide for specific measures designed to ensure transparency and accountability, including regular reporting to, and information-sharing with, any federal government oversight mechanisms established to safeguard taxpayer investments;
Protect taxpayers by granting the most senior status for any government loans provided, ensuring that taxpayers get paid back first;
Assure that taxpayers benefit as corporate conditions improve and shareholder value increases through the provision of warrants or other mechanisms;
Bar the payment of dividends and excessive executive compensation, including bonuses and golden parachutes by companies receiving taxpayer assistance;
Include proposals to address the payment of health care and pension obligations;
Demonstrate the auto companies’ ability to achieve the fuel efficiency requirements set forth in the Energy Independence and Security Act of 2007, and become a long-term global leader in the production of energy-efficient advanced technology vehicles; and
Require that government loans be immediately callable if long-term plan benchmarks are not met.
The auto companies’ shareholders, business partners, and prospective benefactors—the American people—deserve to see a plan that is accountable to taxpayers and that is viable for the long-term. In return for their additional burden, taxpayers also deserve to see top automobile executives making significant sacrifices and major changes to their way of doing business.
We look forward to working with you to ensure a viable American automobile manufacturing sector for decades to come. If we are successful, we can ensure a brighter future for the automobile industry, our nation, and our planet.
Thank you for your prompt attention to this matter.
Sincerely,
Nancy Pelosi
Speaker of the House
Harry Reid
Senate Majority Leader
