Published on ShanghaiDaily.com (http://www.shanghaidaily.com/)
http://www.shanghaidaily.com/sp/article/2008/200812/20081210/article_383904.htm
Auto funding plan may see government in driving seat
Created: 2008-12-10 0:23:27
Author:John Hughes
THE United States government may end up holding stakes in General Motors Corp, Ford Motor Co and Chrysler LLC if Congress and the White House reach agreement on a financial bailout for the car makers.
Under the proposed rescue, details of which are still being discussed, the Treasury would get warrants for stock equivalent to 20 percent of any government loans, according to Bloomberg News.
With GM seeking as much as US$10 billion and valued at US$3 billion, the state may become the biggest shareholder. The legislation isn't clear on what kind of holding the government would take, leaving it the option of preferred, common, voting or non-voting shares.
Democrats in Congress drafted the plan to aid car makers with US$15 billion in loans.
The legislation, which allows the President to appoint a so-called auto czar, needs 60 votes to overcome a Republican threat in the Senate to stall the measure in endless debate using a parliamentary maneuver called a filibuster.
House Speaker Nancy Pelosi yesterday suggested former Federal Reserve Chairman Paul Volcker as a possible czar to oversee the bailout.
"Somebody like Paul Volcker, who has the bipartisan confidence, and public and private confidence," Pelosi, a California Democrat, said on NBC yesterday when asked who President George W. Bush should name.
Some Senate Republicans on Monday expressed doubts about the Democrats' plan, to be voted on in a special session this week.
"I remain concerned about committing federal dollars for the Big Three without any clear strategy that the money will be put to good use and repaid," said Senator Judd Gregg of New Hampshire, the top Republican on the Budget Committee.
Appears weak
Tennessee Republican Senator Bob Corker said the plan "appears to be weak and lacking the benchmarks we believe necessary to put these companies on a viable, sustainable path."
With President-elect Barack Obama's Illinois Senate seat now unoccupied, the Democrats' majority has narrowed to 50-49, including two independents. That means Democrats, even if they are unified, must attract 10 Republican votes to overcome filibusters. The newly elected Senate, with at least a 58-42 Democratic majority, won't convene until early January.
Some Republicans, including Senators George Voinovich of Ohio and Kit Bond of Missouri, have supported legislation to aid car makers. Voinovich and Bond last month proposed drawing on previously authorized funds meant to help GM, Ford and Chrysler retool their factories to make more energy-efficient cars.
Last week Pelosi agreed, breaking an impasse with the White House.
Under the proposed rescue, details of which are still being discussed, the Treasury would get warrants for stock equivalent to 20 percent of any government loans, according to Bloomberg News.
With GM seeking as much as US$10 billion and valued at US$3 billion, the state may become the biggest shareholder. The legislation isn't clear on what kind of holding the government would take, leaving it the option of preferred, common, voting or non-voting shares.
Democrats in Congress drafted the plan to aid car makers with US$15 billion in loans.
The legislation, which allows the President to appoint a so-called auto czar, needs 60 votes to overcome a Republican threat in the Senate to stall the measure in endless debate using a parliamentary maneuver called a filibuster.
House Speaker Nancy Pelosi yesterday suggested former Federal Reserve Chairman Paul Volcker as a possible czar to oversee the bailout.
"Somebody like Paul Volcker, who has the bipartisan confidence, and public and private confidence," Pelosi, a California Democrat, said on NBC yesterday when asked who President George W. Bush should name.
Some Senate Republicans on Monday expressed doubts about the Democrats' plan, to be voted on in a special session this week.
"I remain concerned about committing federal dollars for the Big Three without any clear strategy that the money will be put to good use and repaid," said Senator Judd Gregg of New Hampshire, the top Republican on the Budget Committee.
Appears weak
Tennessee Republican Senator Bob Corker said the plan "appears to be weak and lacking the benchmarks we believe necessary to put these companies on a viable, sustainable path."
With President-elect Barack Obama's Illinois Senate seat now unoccupied, the Democrats' majority has narrowed to 50-49, including two independents. That means Democrats, even if they are unified, must attract 10 Republican votes to overcome filibusters. The newly elected Senate, with at least a 58-42 Democratic majority, won't convene until early January.
Some Republicans, including Senators George Voinovich of Ohio and Kit Bond of Missouri, have supported legislation to aid car makers. Voinovich and Bond last month proposed drawing on previously authorized funds meant to help GM, Ford and Chrysler retool their factories to make more energy-efficient cars.
Last week Pelosi agreed, breaking an impasse with the White House.
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