Auto Leaders to Press for More Federal Aid
Thursday, November 6, 2008
Top auto industry executives and the president of the United Auto Workers plan to meet with House Speaker Nancy Pelosi today to ask for additional federal aid for the struggling U.S. carmakers.
Chief executives G. Richard Wagoner Jr. of General Motors, Alan Mulally of Ford, Robert L. Nardelli of Chrysler and UAW president Ron Gettelfinger are in Washington to argue that if there is a November stimulus package from Congress, the auto industry should receive an additional $25 billion loan to retool for production of energy-efficient vehicles, according to sources familiar with the matter who were not authorized to speak publicly about the meeting. That measure has been endorsed by President-elect Barack Obama and other Democrats.
Yesterday, the Energy Department completed the interim program rules for the existing $25 billion loan package. The rules allow automakers and suppliers to apply for government funding. Just last month the department said it could take more than a year for the money to reach the troubled automakers. Industry officials and members of Congress urged the department to accelerate the process.
"Since Congress provided funding for this loan program approximately 30 days ago, the Department has worked quickly and responsibly to draft this rule, set up a loan office and establish a credit review board to review loan applications," Secretary of Energy Samuel W. Bodman said in a statement yesterday.
Still, the loan must comply with the National Environmental Policy Act and the Congressional Review Act, which prevents a regulation from being implemented until 60 days after the next Congress convenes in January.
During his campaign, Obama said injecting financial aid into the struggling U.S. auto industry would be one of his top priorities as president. But he also said that help would come with strings attached.
"We will provide you with the resources you need to retool," Obama said last week on NBC's "Nightly News with Brian Williams." "We'll help you with some of your legacy costs in terms of health care and pension costs for your workers. But in exchange, that money has to be reinvested in creating the high-energy -- the high-efficiency cars of the future."
Detroit is seeking more immediate help. Automakers collectively reported their lowest sales in 17 years Monday, casting more uncertainty on the jobs of union workers who supported Obama during the election. General Motors, meanwhile, has sought government financing to help it complete a merger with Chrysler.
In remarks prepared for a speech before the Original Equipment Suppliers Association last night, Troy Clarke, president of General Motors North America, said the next 100 days are critical for the auto company.
"In fact, this may be the most crucial time in the history of our industry," Clarke said.
Obama has proposed doubling to $50 billion the size of a proposed loan package approved by Congress to hasten the development of fuel-efficient vehicles. Representatives in Obama's transition office could not be reached for comment.
Obama's long-term fixes for the industry have been tethered to advancing green car technologies and U.S. energy independence, according to the New Energy for America plan he unveiled in Lansing, Mich., in August.