Strict conditions almost certain for automaker bailout
Sending Detroit's Big Three billions with no strings attached would be folly, some say. Others contend too many requirements would strangle a weak industry.
Reporting from Los Angeles and Washington — With pressure rising for the government to save U.S. automakers from the financial junkyard, the question is fast becoming: Should General Motors, Ford and Chrysler simply get infusions of tax dollars? Or, in exchange for the billions, should they be forced to accept sweeping changes that critics say are necessary for their competitiveness and survival?
Environmentalists want government mandates to shift Detroit's output to more fuel-efficient, lower-polluting vehicles. They also want the automakers to drop legal challenges to California's new vehicle emission standards.
"These chuckleheads got into this problem because they're refusing to make greener, more efficient vehicles, which is exactly what the California standards require," said David Bookbinder, the Sierra Club's chief climate counsel, who was drafting proposed wording Thursday for legislation that that would force the automakers to abandon their lawsuits.
Other advocates are seeking new leadership in corporate boardrooms and executive suites, plus commitments to more competitive products.
Saving companies that have been poorly run is a waste of time and money, some critics say.
"It's time for new management and stringent conditions," said Rep. Jim Cooper (D-Tenn.), a member of the Blue Dogs, a group of fiscally conservative congressional Democrats. "It's Uncle Sam. It's not Uncle Sucker."
Democratic lawmakers have said they want "strong conditions" on any assistance to "maximize the potential for the industry's recovery." But they have provided few specifics as they draft a $25-billion emergency loan package. The money would come from the $700-billion financial rescue fund already passed by Congress, and would be in addition to $25 billion in loan money approved this fall -- but not yet available -- to help automakers retool their factories to produce more energy-efficient vehicles.
House Financial Services Committee Chairman Barney Frank (D-Mass.), who is drafting the House legislation, will not include specific conditions beyond the now-standard bailout requirements limiting executive compensation and severance packages, said spokesman Steve Adamske. But the Senate may include some specific requirements in its version.
