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Pelosi Calls for `Emergency' Aid to U.S. Automakers (Update1)
By Laura Litvan
Enlarge Image/Details
Nov. 11 (Bloomberg) -- House Speaker Nancy Pelosi wants ``immediate action'' to give automakers additional aid, and said Congress may take up the legislation as early as next week.
The failure of ``one or more of the major American automobile manufacturers'' would have a ``devastating impact on our economy,'' Pelosi said in a statement e-mailed to reporters.
Pelosi said any aid to the automakers would come with conditions. Pelosi did not specify the level of assistance she supports, but said it should come from the $700 billion Congress authorized the Treasury to use to help stabilize the financial services industry. Pelosi said she is tapping House Financial Services Chairman Barney Frank to write the legislation.
``Emergency assistance to the automobile industry would be conditioned on executive compensation restrictions, a prohibition on golden parachutes, rigorous independent oversight, and other taxpayer protections to ensure that any companies that benefit from this assistance - and not the taxpayers - bear the full burden of repaying any costs that are incurred,'' Pelosi said.
Pelosi's call for federal aid comes as shares of General Motors Corp., the biggest U.S. automaker, reached a 66-year low today. The company said last week it may run out of operating cash as soon as year's end. GM had $16.2 billion on hand as of Sept. 30, down from $21 billion at the end of June, and needs at least $11 billion to pay its monthly bills.
`Urgent Action'
``We appreciate the Speaker's call for urgent action. We are ready to work with Congress and the administration to secure the immediate support we need to bridge the current economic crisis,'' General Motors said in a statement.
White House spokesman Tony Fratto said the Bush administration didn't have an immediate comment on Pelosi's call for federal aid.
Ford Motor Co. fell 13 cents, or 6.7 percent, to $1.80 at 4:15 p.m. in New York Stock Exchange composite trading. General Motors fell 44 cents, or 13.1 percent, to $2.92.
Pelosi was among the lawmakers who met last week with the chief executives of General Motors, Ford and Chrysler LLC.
The three companies are seeking $50 billion in federal loans to help them weather the worst auto market in 25 years, according to a person familiar with the matter.
Earlier this fall, Congress approved $25 billion in low- interest loans for the industry.
To contact the reporters on this story: Laura Litvan in Washington at llitvan@bloomberg.net
Last Updated: November 11, 2008 16:34 EST
Pelosi Calls for `Emergency' Aid to U.S. Automakers (Update1)
By Laura Litvan
Enlarge Image/Details
Nov. 11 (Bloomberg) -- House Speaker Nancy Pelosi wants ``immediate action'' to give automakers additional aid, and said Congress may take up the legislation as early as next week.
The failure of ``one or more of the major American automobile manufacturers'' would have a ``devastating impact on our economy,'' Pelosi said in a statement e-mailed to reporters.
Pelosi said any aid to the automakers would come with conditions. Pelosi did not specify the level of assistance she supports, but said it should come from the $700 billion Congress authorized the Treasury to use to help stabilize the financial services industry. Pelosi said she is tapping House Financial Services Chairman Barney Frank to write the legislation.
``Emergency assistance to the automobile industry would be conditioned on executive compensation restrictions, a prohibition on golden parachutes, rigorous independent oversight, and other taxpayer protections to ensure that any companies that benefit from this assistance - and not the taxpayers - bear the full burden of repaying any costs that are incurred,'' Pelosi said.
Pelosi's call for federal aid comes as shares of General Motors Corp., the biggest U.S. automaker, reached a 66-year low today. The company said last week it may run out of operating cash as soon as year's end. GM had $16.2 billion on hand as of Sept. 30, down from $21 billion at the end of June, and needs at least $11 billion to pay its monthly bills.
`Urgent Action'
``We appreciate the Speaker's call for urgent action. We are ready to work with Congress and the administration to secure the immediate support we need to bridge the current economic crisis,'' General Motors said in a statement.
White House spokesman Tony Fratto said the Bush administration didn't have an immediate comment on Pelosi's call for federal aid.
Ford Motor Co. fell 13 cents, or 6.7 percent, to $1.80 at 4:15 p.m. in New York Stock Exchange composite trading. General Motors fell 44 cents, or 13.1 percent, to $2.92.
Pelosi was among the lawmakers who met last week with the chief executives of General Motors, Ford and Chrysler LLC.
The three companies are seeking $50 billion in federal loans to help them weather the worst auto market in 25 years, according to a person familiar with the matter.
Earlier this fall, Congress approved $25 billion in low- interest loans for the industry.
To contact the reporters on this story: Laura Litvan in Washington at llitvan@bloomberg.net
Last Updated: November 11, 2008 16:34 EST
