WASHINGTON — Democratic leaders ordered Detroit’s Big Three automakers Friday to submit what amounts to a detailed loan application to Congress so lawmakers can decide whether to give the beleaguered industry an emergency $25 billion lifeline.
In a letter to the auto executives released Friday afternoon, House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid demanded a detailed accounting by Dec. 2 of the companies’ financial condition and short-term cash needs, as well as how they would achieve long-term viability.
“The auto companies’ shareholders, business partners, and prospective benefactors — the American people — deserve to see a plan that is accountable to taxpayers and that is viable for the long-term,” Pelosi, D-Calif., and Reid, D-Nev., wrote.
The Democrats also called on the automakers to show how they would ensure that the government would be reimbursed and share in future profits, eliminate dividends and lavish executive-pay packages, meet fuel-efficiency standards, and address their health care and pension obligations to workers if they got the federal help.
General Motors Corp. on Friday said it will extend its holiday shutdown or make other production cuts at five factories as it fights to stay solvent.
The company also announced changes at five other factories that could increase production of some models, all based on a volatile U.S. auto market that has slumped to a 25-year low. The changes won’t be the last as cash-starved GM tries to conserve as much money as possible while awaiting congressional action.
GM said it will cancel a down week starting Dec. 8 at its Wentzville, Mo., factory that makes full-size vans, and will keep or restore overtime at factories in Delta Township, Mich., near Lansing; Spring Hill, Tenn.; Arlington, Texas; and Fort Wayne, Ind.
Factories facing cuts include a plant in Lordstown, Ohio, where workers were told that the normal two-week holiday shutdown will be extended until Jan. 20. The sprawling factory complex stamps parts for and assembles the Chevrolet Cobalt and Pontiac G5 small cars.
The Bush administration sharply criticized the Democrats for departing Washington for a congressional recess without acting on a rescue for the carmakers.
“How could they leave town when the auto companies were just here (this) week saying some of them were on the verge of running out of cash?” Commerce Secretary Carlos Gutierrez said in an interview. “I think it’s a very irresponsible attitude toward a very serious matter.”
And President Bush himself went on the offensive to press the point that leaders failed to grab onto a bipartisan proposal.
“Unfortunately, the leadership in Congress adjourned without even allowing this measure to come up for a vote,” Bush said in his Saturday radio address, taped Friday and released early. “My position is clear: If the automakers are willing to make the hard decisions needed to become viable, they should be able to receive the funds Congress already allotted to them for other purposes.”
After making an auto bailout a top priority of last week’s brief post-election session, Democrats scrapped planned votes on a rescue plan they said lacked support. They said their request for a plan from the Big Three was designed to give General Motors Corp., Ford Motor Co. and Chrysler LLC another chance — after a disastrous pair of hearings last week on Capitol Hill — to make their case to lawmakers and the public.
Hearings are expected the week after next, and lawmakers could consider legislation during the week of Dec. 8, but only if the industry shows that taxpayers and auto workers would be protected, congressional leaders said.
