The Big 3’s debt to be cleared?

November 7, 2008

Report from The Detroit News:

WASHINGTON — House Speaker Nancy Pelosi said Wednesday that Congress is considering bailing out Detroit’s Big Three automakers.

“We may need to make a statement of confidence in our auto industry,” Pelosi told NPR this afternoon. “We’re not saving those companies, we’re saving an industry. We’re saving an industrial technological and manufacturing base… It’s about jobs in America.”

Pelosi held a meeting Monday with Democratic leaders to consider a request from Detroit’s Big Three automakers for another $25 billion in “bridge financing” to help them survive a huge downturn in auto sales this year. “It would be our intention to have some level of recoupment for the taxpayer,” Pelosi said.

She acknowledged that taxpayers could resent “what they consider to be a bailout of inefficiencies” in the auto industry.

The Detroit News reported on Tuesday that if an agreement is reached to provide more aid, House Democrats will insist that the money come with strings attached, including limits on executive compensation and bonuses.

Congressional leaders did not agree on a specific amount of aid, and planned to gather more information this week.

Rep. Dale Kildee, D-Flint, who is chairman of the House Auto Caucus, did not attend Monday’s meeting said discussions are underway about another $25 billion in loans for automakers.

“The industry is in serious trouble and we need to get them the cash as soon as possible,” Kildee said Monday.

Detroit’s Big Three automakers have had a strained relationship with House Democrats.

The two sides sparred over the 2007 energy bill that called for a 40 percent increase in fuel efficiency requirements by 2020. But Pelosi was an early advocate of funding the $25 billion factory retooling program and her support was critical to the program passing Congress in September.

The Monday meeting included House Majority Leader Steny Hoyer, D-Md., and many committee chairmen, including Reps. George Miller, D-Calif.; Chris Van Hollen, D-Md.; Barney Frank, D-Mass.; James Clyburn, D-S.C.; Xavier Becerra, D-Calif.; and Sander Levin, D-Royal Oak. Rep. John Dingell, D-Dearborn, took part by phone, as did other members on the campaign trail.

Pelosi designated Miller, chairman of the House Education and Labor Committee, as the point person on the issue.

Pelosi also discussed the auto issue separately with Sen. Majority Leader Harry Reid, D-Nev., on Monday, aides said.

Congressional leaders are likely to put out a statement on Friday – the same day that General Motors Corp. and Ford Motor Co. are expected to announce heavy third-quarter losses.


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