"Good afternoon, thank you for joining us. We are, as you know, in conversations about how we go forward with the package for the auto industry that produces, at the end of the day, and that means very soon, a viable plan for our country.
"It is an interest that is important to our economy, to our industrial base, the workforce concerns that are important to our country. We want to be able to review the performance of the auto companies as we go forward. In order to do that, it is important for us to pass legislation that will set criteria for restructuring and reorganization of that industry and the companies within it.
"It is important to note that unless the restructuring that is called for in this legislation and the goal of viability is achieved by March 31, there is no justification for spending any more taxpayer dollars. Now it has been said this is a loan of $15 billion because it's for a different purpose than under Section 136; 136 is for innovation.
"We should be able to use TARP funds, but the White House doesn't want to do that, so we have to use funds that are designated for a different purpose that is riskier. We can't spend as much money, and this is why it is $15 billion. It may take more than $15 billion to get to March 31. But come March 31, it is our hope that there will be a viable automotive industry in our country with transparency and accountability to the taxpayer. We think that is possible.
"But if they don't meet the conditions of restructuring, there is not going to be an endless flow of money to this industry, left to their own devices and the practices they have engaged in.
"While they re-evaluate their relationships, we call this a barbershop. Everyone is getting haircuts, in terms of the conditions. Labor has to take a haircut because of the concessions and expediting the concessions. Shareholders have to take a haircut. There has to be consideration of the relationship with dealerships, with suppliers, and the management itself has to take a big haircut on all of this.
"So we will see how willing everyone is to go into the future, but we want to recognize the importance of the automotive industry to our country. Their survival is essential to our economy. If they cannot survive, then we have to make a re-evaluation of the leadership as well, because we will not give up on our automotive industry. It's just a question of how it is manifested and how it is led.
"I am very encouraged by the conversations so far. We are on the path. I will only support using Section 136 with the assurance that we will get it back in a number of weeks. And in fact, in a number of weeks, if the Big Three are not on the path to viability, we may want our money back sooner than March 31 instead of over the longer term that would be built into the bill should they again be a thriving, competitive, innovative auto industry for the future."
Source: Office of the Speaker of the House
Published by Mike Hitchen, Mike Hitchen Consulting
Putting principles before profits
This blog will be on holiday from Dec 15 2008 -Jan 12 2009!
Putting principles before profits
This blog will be on holiday from Dec 15 2008 -Jan 12 2009!
