Letter From Congressman Wilson on Detroit Bailout

Delivered to my inbox today:

Dear Friends,

As you know, the Big Three domestic carmakers recently came to Congress to ask for a bridge loan to get them through the toughest economy we’ve seen since the Great Depression. The domestic auto industry represents three million jobs; this includes direct manufacturing, suppliers, and dealers. Their sales make up nearly 10% of the entire U.S. retail marketplace. Failure of these companies would risk a domino effect which would further damage our already fragile economy.

I supported the bridge loan to the auto industry because I viewed it as a good investment of taxpayer money for America and for working families. Our country cannot allow the heart of our manufacturing base to collapse.

On December 10th, 2008, the House passed HR 7321, the Auto Industry Financing and Restructuring Act, by a vote of 237-170. This legislation would have provided funds the domestic automotive industry needs to keep operating for the next three months. This would have been done by modifying existing loans originally intended to increase the fuel efficiency of the industry. The House-passed bill made it clear that business as usual would not be tolerated at the Big Three by requiring the companies to make necessary common sense changes to ensure long term survival. Our legislation contained strict oversight and reform mechanisms. The bill also would have protected taxpayers’ investment by including requirements for a prohibition on dividends. Finally, the legislation contained a provision to ban bonuses for the 25 most highly paid employees, prohibitions on golden parachutes, limits on compensation plans, and a required divestment of private aircraft or leases.

I’m disappointed to report that the Senate was not able to move forward with the legislation. However, as of Friday morning, the White House has opened the door for the possible use of funds for automakers from the $700 billion economic rescue package. I am hopeful that the president and the Treasury Department act quickly to get funds to the automakers.

With that said, I am hopeful that the president’s administration will require, as the House-passed legislation would have required, the same tough accountability and shared sacrifice by all parties – executives, unions, suppliers, creditors, dealers, bondholders, and shareholders. The House’s legislation contained tough accountability and strict timelines for the automakers to develop a comprehensive restructuring plan to place them on a path toward viability and competitiveness. Failure by the automakers and other stakeholders to act urgently in developing and implementing a restructuring plan would end taxpayer assistance and permit the recalling of all loans. I believe these same strong taxpayer protections and tough conditions should apply to any assistance provided to the automakers by the administration.


Charlie Wilson
Member of Congress
Ohio’s Sixth District

Sincerely,

 

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