Agreement Reached on Auto Bailout

December 8, 2008 12:00:00 AM PST
Through the weekend, Congressional leaders were hard at work on a possible deal for the big three automakers. Although it would keep General Motors, Ford, and Chrysler on the road, the deal comes with a hefty sticker price for taxpayers.$15-billion dollars is the minimum the U.S. auto industry would get under a proposed bailout. A compromise is still being hammered out after a weekend of negotiations between the White House and Congressional leaders. Even though there's no agreement the Senate will start debating the plan on Monday afternoon.

"What we're talking about is trying to get from here to a point where we may be able to restructure this industry," said Sen. Christopher Dodd, Chairman, Banking Committee.

In an effort to make the U.S. auto industry viable, lawmakers want Chrysler, General Motors, and Ford to agree to a series of conditions before they receive any cash including a possible Auto Czar to oversee how the money is spent, restrictions on executive pay, and strict loan payments

"Taxpayer assistance should only be given to those willing to make difficult decisions to protect company," said White House Spokesperson Dana Perino.

Trying to save their employers, auto workers descended on Capitol Hill. The United Auto Workers has already agreed to billions in concessions and more could be needed.

Congress is expected to vote on the plan later this week; but any deal will face a tough fight. Some lawmakers believe instead of a bailout the automakers should be forced to go into bankruptcy

"These companies would be better off if they sought reorganization, under Chapter 11, of the bankruptcy code, like so many corporations have done," said Senator Jeff Sessions (R) Alabama.

Under the current bailout proposal, the cash would come from funds Congress already set aside for the big three to develop fuel efficient technology. Only GM and Chrysler would receive loans immediately, while Ford would have to wait receive its portion.

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