Capitol Hill was bustling over the weekend as lawmakers sought to reach an agreement on low-interest loans provided to Detroit’s automakers. Sentiment towards the loans had grown a bit more positive, no longer a question of whether the loans would be provided, but a question of when and just how much would be given to them – even though there was still lingering doubt Sunday about the viability of the loans.
Michigan’s Carl Levin, a Democrat, told Fox News on Sunday that “they’re very close to a deal, I’m very confident there will be a deal, and that will happen within 24 hours.”
Levin told the program that he expects a bill to be introduced as soon as today.
The Senate will come back to session later today and the House will return on Tuesday.
Both George W. Bush and Barack Obama have stated that the the automakers should not be allowed to fail, but there is still a large faction of lawmakers who question how far the loan would take the automakers.
“This is a bridge loan to nowhere,” Alabama Republican Senator Richard Shelby said on Fox. “This is a down payment on many billions to come. … These companies have basically failed, or are failing.”
Levin gave some details of what he believes the bill would hold. It included at least $17 billion – more than the $14 billion General Motors and Chrysler have said they require to survive through March, but well under the $34 billion the three automakers, Ford included, have requested in lines of credit.
The bill would also include such changes to the industry as an overseer to monitor the restructuring that would be mandated under the conditions of the loans. The bill, according to Levin, could potentially require the Bush and Obama administrations to consult one another to decide the overseer.
The Detroit automakers also might have to drop their lawsuits challenging California’s global warming rules imposed on vehicles to make them cleaner and more efficient. The rules have been argued by both foreign and domestic automakers, but without backing from Detroit, California would almost certainly win.
Finally, the automakers are almost certainly facing a regime change as a part of the bill. GM’s CEO, Rick Wagoner, is the most likely candidate to lose his job.
“I think he has to move on,” Connecticut Democrat Senator Chris Dodd said. “If you’re really going to restructure this, you’ve got to bring in a new team to do this.”
Wagoner, who has been with General Motors in various positions for nearly 30 years, said last week, “I think the leadership team we have is the right one, but I serve at the pleasure of the board.”
Obama has supported a shake-up of the automakers, but it isn’t clear whether he’d support removing Wagoner or any of the other executives.
“If this management team doesn’t understand the urgency of the situation and isn’t willing to make the tough choices and adapt to these new circumstances, then they should go,” Obama said Sunday. “If on the other hand they are willing and able and show themselves committed to making those important changes, that raises a different situation.”
GM’s board and Levin have stated that they don’t think Wagoner should leave.
