From NBC's Mike Viqueira
When we last left the auto bailout story, GM and Chrysler were the beneficiaries of a stop-gap loan from the taxpayers, via the TARP.
The money came on the condition that the companies present a plan on how they would move forward and remain viable, especially if they are to come back to the federal treasury in search of further assistance.
In view of all this, Nancy Pelosi and Barney Frank have written the CEOs of both companies in order to lay down some markers.
Their letter, released publicly:
Dear Mr. Nardelli and Mr. Wagoner:
As the February 17 deadline approaches for the automobile companies to submit restructuring plans to the federal government, we are writing to stress the importance of your submitting 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 October of last year, Congress approved the Bush Administration's request to provide $700 billion in taxpayer assistance to stabilize the financial system, following warnings by the Administration that inaction would lead to a financial catastrophe. The Bush Administration's lack of transparency in implementing this initiative, and its failure to address the foreclosure crisis head-on (the root cause of the financial crisis), resulted in significant public skepticism about large-scale government interventions to rescue private corporations.
Amidst this public skepticism, the House of Representatives in December passed legislation that authorized taxpayer assistance to the auto industry. This legislation, which the Senate failed to pass, served as the basis for the Bush Administration's December initiative to provide loans to the automobile industry from the TARP.
Mindful that 1 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 the global economy depends on its pursuit of excellence.
Though we recognize that our economy faces significant challenges, Congress and the American people believe that your restructuring plan must include the following:
A documented assessment of your company's ability to ensure long-term viability as you retool for the future, including a target market size;
A commitment that the sacrifices necessary to turn the industry around will be shared equitably by all stakeholders;
A commitment to protecting and sustaining the health and pension benefits that have defined "quality" American jobs and allowed millions to enter the middle class;
A demonstrated commitment to restructure your company's debt in a manner that protects the interests of the taxpayers;
An additional assurance that taxpayers benefit as corporate conditions improve and shareholder value increases; and,
A demonstration of your ability to achieve or exceed the fuel efficiency requirements set forth in the Energy Independence and Security Act of 2007, and the emissions standards adopted by California and other states, if they receive Federal approval, and become a long-term global leader in the production of fuel-efficient and advanced technology vehicles.
We trust that your restructuring plan will demonstrate to the world that you are willing to make the tough decisions that modernize your operations, restructure your debt, enhance your competitive status in the global marketplace, and protect American jobs for the future. Thank you for your consideration of this matter.
NANCY PELOSI BARNEY FRANK