Skip to main content

During a press conference a bi-partisan group of Senators including Michigan’s Carl Levin and Debbie Stabenow outlined an agreement just reached to enable government loans to General Motors, Ford and Chrysler, and in some cases to major automotive suppliers as well. Senate Banking Committee leaders and Automotive Caucus were also involved.

The Deal on Loans
Automotive Detroit ‘Big 3’ are to submit by December 2, 2008 individual "viability plans" including turn around actions and financial requirements as part of their potential applications for loans. Those plans from General Motors, Ford and Chrysler that must demonstrate the carmakers can become "economically viable" and pay the loans back to taxpayers, are to be submitted to the US Department of Commerce and will include "strong oversight" from Congress and the Department of the Treasury.

Crossposted with permission of guys at Bagley Street Continues below the fold...

Continues

Should there not be a vote today or tomorrow, the Senate is to reconvene on December 8, 2008 to review the "Viability Plans". Several members of the bi-partisan Senate group stated that the Automotive OEMs or manufacturers need to "not only persuade the Congress, but the American people. "

Rough 72 Hours for the Auto Industry

While Senate staffers and others ranging from auto company executives to industry consultants and subject matter experts worked through the night on the compromise that will focus on automotive OEM's providing their business cases to Congress, earlier in the day there have been a number of news stories and statements from key players saying that a deal for Big 3 loans or a "bail-out" was not going to happen this week.

Statements by Top Law Makers Earlier Today

Speaker of the House Nancy Polosi :

"It is all about accountability and viability. We need to see a plan where
the auto industry held can be accountable. Until they show us the plan, we
cannot show them the money."

Senate Majority Leader Harry Ried:

"Democrats are determined to help autoworkers in this very important

industry. The sad reality is that no one has passed a plan that can pass through
the House and the Senate and get signed by President Bush."

Later in the day...

"In light of the importance of this issue to all of us, we have decided that
the best way to proceed is to give the auto companies another opportunity to
make their case."

From the Press Conference Announcing a Senate Deal:

Michigan's Senator Carl Levin restated and the failure of any to the Big 3 could very well lead to a possible "depression" and that this was a "very, very important moment".  

From Michigan's other Senator Debbie Stabenow called the current situation was about the "fundamentals of our economy" and that the current "global crisis" in the financial markets and manufacturing  not only affects the US, but Canada and Europe" and that has "a ripple affect across the world." She also said that the failure fo the US domestic automotive industry would affect "millions and millions of people", and that something had to be done to save the companies that "created the middleclass."

Ohio Senator Sherrod Brown, also part of the news conference  said the impact and cost of "inaction is too great", but he added the loan would lead to "needed structural changes" related to labor costs, executive compensation and the possible changes to OEM board members. He argued that allowing one or more of the Big 3 to got into bankruptcy would "cripple them" because no one would want to buy a car from a bankrupt company, an arguement that has not necessarily had much weigh thus far.

Backing away from the "Edge of a Cliff"

Despite the inability of the top automotive executives to communicate their case to both Congress and the American public, "cooler heads" appear to be prevailing as predicted by the Center for Automotive Research's Dr. David Cole and other industry insiders.

More later as more reports of the deal are made public...

Originally posted to Hector Solon on Thu Nov 20, 2008 at 02:13 PM PST.

EMAIL TO A FRIEND X
Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags

?

More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

  •  accountability (6+ / 0-)

    I absolutely agree about the need for accountability with GM, Ford, and Chrysler (and also am in favor of that bailout). But what happened with such demands for the 700 (actually 850) billion tendered earlier?

    •  AIG is white collar... (7+ / 0-)

      ...so they get to fly their private jets to congress and get treated like kings, while GM has to come into the service entrance and squeal like a pig for their amusement....

      It's all about class... blue collar employers are not going to get respect at all...

      It profits a PUMA nothing to give their soul for the whole world... but for McCain? --Sir Thomas More (if he were here now)

      by LordMike on Thu Nov 20, 2008 at 02:25:23 PM PST

      [ Parent ]

      •  "Strong OverSight" is the NEW... (1+ / 0-)
        Recommended by:
        Losty

        "Sternly Worded Letter" !

        Do the Big Three Management get to stay in power?

        Then it's not "Strong OverSight".

        I mean the Senate Dems can't even stand up to Joe Fucking Lieberman, why should anyone believe a damn thing any of those weaklings and liars say?

        RMD

        The Bushiter's Iraq 2004 - 1268 Dead, about 25K Medivacs and 9000 Maimed... It's the Bushiter Way, wasting other people's money and lives. And it's worse now.

        by RedMeatDem on Thu Nov 20, 2008 at 03:16:05 PM PST

        [ Parent ]

  •  Tip Jar for Tucker and... (16+ / 0-)

    the guys that were up all night at Bagley Street.

    They need volunteers in the "virtual war room" we helped them with a couple days ago if you would like to join, it's a public Yahoo Group.

    ...and oh, yeah they SUPPORT loans, OK "bail-out" for the automotive makers.

  •  This looks like face (5+ / 0-)

    saving for Pelosi and Reid. The auto makers have about as much chance of coming up with a plan to make them viable by the beginning of next month as I do of winning the loto.  

  •  Well, I hope so... (7+ / 0-)

    I'm not happy we have to do this, but I'd rather throw $25 billion at it, than find out we really made a bad mistake.

    I DO expect some serious CAFE standards increases to pass, though.

    All that is required for evil to flourish is for good people to stand by and do nothing.

    by davewill on Thu Nov 20, 2008 at 02:20:10 PM PST

  •  Did the Wall Street Bankers" "show them a plan" (3+ / 0-)
    Recommended by:
    Caelian, bablhous, chrome327

    ..when they happily gobbled up 28 times the money that's being considered for the American auto industry?

    Or did they just go get themselves a pedicure and a massage complete with a "happy finish?"

    What do you mean, doc? My blood type is B negative? I try and be positive most of the time.

    by SecondComing on Thu Nov 20, 2008 at 02:26:14 PM PST

    •  Someone just informed me that it's "happy ending" (0+ / 0-)

      What the hell do I know? I don't frequent Korean massage parlors or high dollar spas.

      I'm actually pretty sure that I wouldn't - Even if I had all the money in the world.

      Like these clowns do.

      I like my massages the old fashioned way. EF Hutton.

      What do you mean, doc? My blood type is B negative? I try and be positive most of the time.

      by SecondComing on Thu Nov 20, 2008 at 06:28:34 PM PST

      [ Parent ]

  •  Did anybody else (1+ / 0-)
    Recommended by:
    bablhous

    catch Pitchfork Pat take that Heritage Foundation guys head off over this?  I never agree with that racist bastard but, godamn, he was en fuego!

    "They want to win, at any price. So, you have a choice: be a fighting liberal or sit quietly. I know what I am, what are you?" -Steve Gilliard.

    by demkat620 on Thu Nov 20, 2008 at 02:28:16 PM PST

  •  Viability plans.... (3+ / 0-)
    Recommended by:
    bablhous, sydneyluv, chrome327

    sound like a good idea.....at least there's some chance for dialogue and transparency with that kind of approach.

    But....WHY THE HELL didn't they insist on this for AIG, and the other Wall Street welfare giveaways?

    I still think this whole thing is about Wall Street getting theirs, while Main Street including the UAW, suppliers, and the taxpayers are getting h-o-s-e-d.....

    If Congress and the auto companies could present a good approach that could be explained to the American people, this would all be resolved quickly.  Instead it's left to the mainstream news media, who don't know jack about cars, investments OR manufacturing businesses, to explain it.  

    Oh, and they only spend 10 mins on the topic before they have to go to the latest celebrity gossip or berserk gunman....

  •  Why can't Palosi & Reid force ... (0+ / 0-)

    people to vote on a plan ?

    What are they afraid of ? Put whatever restrictions and regulations that are needed - and vote. If it does not pass - then you hold the people who voted against the bill accountable for the consequences. If it passes and the Big 3 won't accept the conditions - then everyone will know who is really to blame (as if it is not evident now).

  •  Not convinced a bail-out is a good thing (0+ / 0-)

    I know the "you did it for them" argument with respect to the banks.  But when does it end?  And why is Chapter 11 reorganization such a bad option?  Restructure the debt, even get a bunch of it written off and the automaker emerges leaner and healthier.

    No, I haven't forgotten about the workers at the auto plants and even at the parts factories.  I don't have a solution for every problem.

    •  Too much danger of them not emerging from (5+ / 0-)
      Recommended by:
      Caelian, JanL, dennisk, sydneyluv, chrome327

      Chapter 11. They're weak right now. Bankruptcy won't fix the fact that they don't have cash. Most of their "creditors" are their suppliers who can't afford to be put off, and would end up in bankruptcy as well.

      Finally, it might kill the UAW, and we're trying to grow unions, not kill them.

      All that is required for evil to flourish is for good people to stand by and do nothing.

      by davewill on Thu Nov 20, 2008 at 02:39:26 PM PST

      [ Parent ]

      •  You are right about Chap. 11. They will still (3+ / 0-)
        Recommended by:
        Caelian, davewill, sydneyluv

        need credit to for Chap. 11 which in today's credit markets will be close to impossible.  Chap. 7 will be disastrous.

        We should consider nationalizing the industry or GM.

        RebelCapitalist - Financial Information for the Rest of Us.

        by dennisk on Thu Nov 20, 2008 at 03:03:48 PM PST

        [ Parent ]

        •  Yeah, people keep blaming the cars... (3+ / 0-)
          Recommended by:
          Caelian, dennisk, sydneyluv

          but the bigger problem is money for car loans and leases. The automakers usually end up making a large share of those loans, then packaging them up. If they can't do that, they can't sell cars. No amount of bankruptcy protection will change that equation.

          They could use some low mileage cars, no doubt. Especially long term, but they really need credit, ASAP.

          All that is required for evil to flourish is for good people to stand by and do nothing.

          by davewill on Thu Nov 20, 2008 at 03:07:58 PM PST

          [ Parent ]

  •  "strong oversight" (1+ / 0-)
    Recommended by:
    shann

    Yeah, I've heard that before.  And then we gave $700 billion to a dude to do whatever he wants with.

  •  And neither do they. (0+ / 0-)

    It's about time that they stopped and admitted that they don't know WTF they're doing.

    Wait a minute...

    Wait a minute...there's something about that.

    Ah,

    My bad. I don't know what I was thinking.

    Carry on.

    Do what you can with what you have where you are - Guild of Maintainers

    by bablhous on Thu Nov 20, 2008 at 02:39:29 PM PST

  •  It's out-and-out lying (3+ / 0-)
    Recommended by:
    bablhous, shann, High Tide

    to claim that anything we do will avoid the Depression.

    He should tell the truth: "We are printing money and giving it to politically sensitive groups BECAUSE THAT'S ALL WE HAVE LEFT!"

    If a depression is a prolonged recession, what's a prolonged depression? A Dark Age... welcome home...

    by Paul Goodman on Thu Nov 20, 2008 at 02:39:57 PM PST

  •  Alternative Plan to Save Auto Co and Union Jobs! (0+ / 0-)
    1.  UAW give up some of it's pay.
    1.  In return the company gives them Big 3 Stock.

    If they turn the Auto Companies around they make huge amount of money.

    If they screw up, they have recyclable paper.

    This is called investing in Auto Companies.  It's called conserving cash and taking a long position.

    What the Unions, Auto Exec and government are doing in their negotiations are putting huge numbers of protections and pulling cash out of the companies.  The Companies are running out of cash.

    If UAW workers actually know how to turn the Big # automobile companies around they would jump on the change to get stocks this cheap.

    If the UAW workers are full of themselves, they will continue to demand cash!

  •  UAW membership can save Auto Co for 6 pk beer /hr (0+ / 0-)

    UAW members can save the Auto Companies for the price of 6 pk of beer per hour per employee.

    An alternate plan is for them to buy their own stocks.  It's really cheap.

    If they honestly believe the auto companies can be saved they would forego a six pack of beer for two shares of GM or one GM and One Ford share of stock.

    One 6 pk of beer is equal two shares of stock.

    Is UAW members stepping up to the plate to rescue their own jobs and the auto companies.

    No, they are the first in line to pull cash out!!

    That is amazing, they want investors, tax payers the USA government to bail their automotive companies out of the ditch but they are the first to raid the cash box to pull their share of cash out of the companies!!

    •  You are trying to portray them as drunks (0+ / 0-)

      Why the reference to beer? It seems like you are trying to portray them as a bunch of drunks. I know during the election we heard "joe six pack" this and "joe six pack" that, but do people realize that was originally a derogatory name for working people? Why should they listen to you if that is the brush you are painting them with?

  •  Honestly if UAW member know how to build cars! (0+ / 0-)

    Honestly every UAW member at this blog have been telling us about the good work UAW members do, about how they improve the productivity, about how it was their hard work that made the company money.

    Show me,  forego a six pack of beer and buy two shares of GM or Ford?  Show me you know how to turn the car company around and show yourself you're telling the truth.  Because if you do turn the company around those stocks can go up 10 times in value.

    Today it is trading at $2 a share.  If you turn the company around and the stock goes to $20 a share you can increase your earnings 10x over.

    $10,000 in stocks can yield $100,000 if you actually turn the company around.

    But if you are full of yourself, then the $10K becomes recycling paper!

    Show me how UAW members know how to turn an Automotive Companies around!

    Prove it to me and make yourselves some big money!!

  •  No more buying cars at cost for UAW. (0+ / 0-)

    Everytime UAW members buy a car at cost it robbing the company of cash resources.

    Show me UAW members understand business and forego this benefit of stealng inventory off the floor by taking cars off the lot at cost.

    When ever a UAW worker take an inventory off the lot at cost and sell it for his or her own profit, it cost the company two sales!  This stupid back door practice discriminate against the customer and is actually costing you your jobs by taking profit from the company!!

    Buy the stock and watch it grow by engaging in good business practice rather than stealing inventory and profit from the company through it back door!!

    Show me UAW you understand business!!

    Show me UAW your membership understand how to turn a automobile company around!!

  •  Take these action then bail out (0+ / 0-)

    UAW need to take posiive steps to support the companies they work for so investors have confidence they are not going to tank the company and walk away with the cash.

    If they want $25-$50 billion from tax payer and banks and investors to put money in the automobile companies, the UAW must stop behaving like the first dude with his hand in the cookie jar.

    Stop pulling cash out of the auto companies.

    1.  Cut back you pay for stock options.  This can be done over night with the HR software used at the Auto Companies.  It can save as much at $1 billion a month.
    1.  Give the workers stock options or outright stocks so they benefit if the company turns around.
    1.  Allow UAW to purchase stocks directly from the company to take a long position in their own future.
    1.  Executive pay must be tied to turning the company around.  The average real estate agent makes 3-6% for the sales of a house.  It is not so bad to give the executives 3-6% stock options that can only be exericed after paying back the government loan and after the company turned around.  This is a huge insentive to turn the companies around in 3-5 years.

    These are all ideas to make management and Union look like they are taking long positions in the company they tell us they know how to run and turn around.  If the management and UAW is full of themselves, they have recycling paper to show for their lies.

    If they turn the company around many of the workers would become wealthy and the executive will also become wealthy and the tax payer will get paid for loaning them the money.

    The existing plan look more like the executives, the union and the Government parading infront of the auto companies with a big Bankruptcy "FOR SALE" sign and they all have their hands in the cash box pulling cash out of the company!!

    Stop it and show me UAW, auto exec and government that you guys know how to look like long term investors instead of monkeys caught in a cookie jar trap!!

    I saw the monkey caught in a cookie jar trap on "Wild Kingdom".  ...and all of you look exactly like the monkey with the hand full of cookie trapped!!

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site