Congressman Wilson on Bush’s Detroit Bailout Plan

In a nutshell, he supports it:

Dear Friends,

I’m relieved that the Administration is taking the vitally important step of providing short term loans to GM and Chrysler.

The American 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.

Earlier this month the U.S. House passed a bill that required across the board concessions from management, workers, and bondholders. The Senate did not pass that bill; but I’m pleased that the Administration used the House’s model that will hold these companies accountable and enact strict oversight on their actions.

According to the terms and conditions of the loan, the Treasury Department will provide financing to facilitate the restructuring of our domestic auto industry, prevent disorderly bankruptcies during a time of economic difficulty, and protect the taxpayer by ensuring that only financially viable companies receive financing.

Auto manufacturers will be provided with $13.4 billion in short-term financing from the TARP (Troubled Assets Relief Program). An additional $4 billion could be available in February. If the companies have not attained viability by March 31, 2009, the loan will be called and all funds returned to the Treasury. A company will only be deemed viable if it has a positive net present value, taking into account all current and future costs, and can fully repay the government loan.

The plan will require companies to make common sense changes to ensure long term survival. Limits will be placed on executive compensation and will eliminate perks such as private jets. Furthermore, companies must allow the government to examine their books and records.

The Administration was quick to protect the banking industry, and I am happy that they have finally come around to protecting the vital auto industry and the millions of jobs connected to it. I look forward to working with the Obama Administration to ensure that these companies quickly get on track.


Charlie Wilson
Member of Congress
Ohio’s Sixth District

Sincerely,

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