Friday, November 21, 2008

Pelosi and Reid Release Text of Demands to Automakers

This reads like an overdue notice from a utility company. They give a shot to Bush and the Federal Reserve for their failure to act, which was a nice touch, and then proclaim "it is critical" that the automakers meet the December 2nd deadline so they can pass around the information to various agencies for review. Did they think that the automakers would stall them off? (would they dare?)

Here is the info that the companies must provide to Congress:

· Provide 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;

· Provide 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;

· Provide for 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;

· Protect taxpayers by granting the most senior status for any government loans provided, ensuring that taxpayers get paid back first;

· Assure that taxpayers benefit as corporate conditions improve and shareholder value increases through the provision of warrants or other mechanisms;

· Bar the payment of dividends and excessive executive compensation, including bonuses and golden parachutes by companies receiving taxpayer assistance;

· Include proposals to address the payment of health care and pension obligations;

· Demonstrate 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.

Sounds reasonable and doable. I would imagine that the manufacturers already can answer a lot of this with the plans they already have in place, anything else the lawyers can probably provide a boatload of legalese for Congress to chew on - although that always leaves open the possibility that this can get more complicated that it needs to be.

"Thank you for your prompt attention to this matter."

Hey, no problem, Nancy. Glad to do it to save 3 million American jobs and the national economy. Our people will be in touch soon.