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Published November 21, 2008 at 5:52 PM
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 House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., Friday sent a letter
to the Big Three U.S. auto executives, calling on them to "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" by Dec. 2. The Capitol Hill
leaders said the quality of the plans will determine whether they call
Congress back into session the week of Dec. 8 to vote on a bailout
of the U.S. car industry.
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In their letter, Pelosi and Reid said the plan must include: - 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;
- 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;
- 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;
- Taxpayer
protections that grant the most senior status to all government loans
provided, ensuring that taxpayers get paid back first;
- Provision
of warrants or other mechanisms that assure taxpayers will benefit as
corporate conditions improve and shareholder value increases;
- Prohibitions
on the payment of dividends and excessive executive compensation,
including bonuses and golden parachutes by companies receiving taxpayer
assistance;
- Proposals to address the payment of healthcare and pension obligations;
- Demonstrations
of 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.
- Bill McConnell
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