Encouraged Administration May Now Act To Keep Companies Afloat, Protect Taxpayers
Dec 12 2008
WASHINGTON – Sen. Tom Carper (D-Del.) issued the following statement in response to the Senate’s failure last night to pass an auto industry rescue bill. The senator voted in favor of the bill aimed at saving hundreds of thousands of manufacturing jobs by loaning $14 billion to the nation’s automakers.
Sen. Carper said this morning:
“Last night’s failure to pass this important legislation was a huge disappointment. Just as we passed an emergency measure to keep our financial sector from collapse, I believe we have a responsibility to provide a financial lifeline to our domestic auto industry to keep Chrysler and GM from declaring bankruptcy. Such a move would surely cripple both companies and cause massive job losses at the worst possible time for our struggling economy.
“No one is a fan of bailouts, and I, too, am concerned about throwing good money after bad. But this legislation would not have given automakers a blank check nor reward continued bad behavior. It was not a grant, a gift or a bail-out. Instead, it would have provided a $14 billion bridge loan to ensure that our domestic auto industry survives difficult market conditions and a shrinking economy while they take steps to modernize and restructure. The measure mandated taxpayer protections, strong oversight and limits on executive compensation, and stipulated that the Big 3 continue restructuring under the direction of a presidentially appointed ‘car czar,’ similar to a trustee in a bankruptcy. If the companies did not comply, their loans could have been recalled.
“Much like the federal government did in the early 1980s when it made a taxpayer investment to keep Chrysler afloat and later realized a sizeable return on that investment, this legislation could have helped preserve the short-term financial solvency of the auto industry and provided long-term financial rewards for taxpayers.
“I believed there was a deal to be had that would have protected taxpayers' investment and required shared sacrifice and concessions from all involved, including lenders, dealers, labor, management and bondholders. Unfortunately, we weren’t able to realize that deal last night.
“I am encouraged by news this morning that the Bush administration is considering using the approved federal funds from the TARP (Troubled Assets Relief Program) to do what Congress failed to do – provide an emergency lifeline to the auto industry to help them get through this difficult period and avoid bankruptcy.
“I strongly urge President Bush and U.S. Treasury Secretary Hank Paulson to act quickly. By doing so, they will give the companies, stakeholders and the government a chance to craft more comprehensive legislation to set the Big Three on the right track for the future.
“Finally, it is important to remember that it is not only the Big Three that need help. Thousands of auto workers across this country, and at home in Delaware, are already losing their jobs no matter how successfully we restructure our domestic auto companies.
“Since 1976, I have had the privilege of working for the people of Delaware, a small state with the only two domestic auto assembly plants on the entire Eastern Seaboard. Our Chrysler plant will close at the end of this month, and it is painful for me and for all the people who have worked there and who have bought their products to watch workers lose jobs and their livelihood.
“It is imperative that we make sure these folks have the opportunity to be trained for new jobs in other industries, enabling them to again make a decent income to support themselves and their families. I will work with the new Congress and Administration to include this in an economic stimulus package next year.”