OK, Here’s What I Want to Know-: UPdate #1 + #2
November 21, 2008
When Did Congress Go Into The Banking Business?
Before a House panel Wednesday were, from left, Rick Wagoner of G.M., Robert Nardelli of Chrysler and Alan Mulally of Ford. NYT
Where is it written Congress is automatically the People’s Banking System available to corporations who have mismanaged their companies and are about to go belly up? Where is it written, it is incumbent on the elected representatives of the People to solve the financial woes of corporations? When was Congress given a Banking Charter allowing them to do business as agents of the People?
If ‘m missing something here… please advise.
Like any other business in financial distress, if their debt structure is out of whack with their profit viability, why would they continue operating in the red for a year or two before seeking HELP?
Large corporations are top heavy with over paid, bloated, elite Executive management; e i. accounting, book-keeping and marketing operations. Think about it…Where was the Chief Financial Officer all this time?
If Nancy Pelosi and Chris Dodd are under the assumption they are the leaders for the decision makers….”WE the PEOPLE”.. when are they going to ask us for our input?
Here is what Nancy Pelosi said yesterday when the subject of Bankruptcy was broached to Automaker CEOs who unsurprisingly shrank away from the proposal:
“Wagoner and Alan Mulally, CEO of Dearborn, Michigan-based Ford, also said under congressional questioning that their companies had studied and rejected the idea of reorganizing under court protection”. (re: Bankruptcy)
“House Speaker Nancy Pelosi said yesterday that “Democrats” reject bankruptcy as an option.”
For the record, here is one Democrat that doesn’t reject Bankruptcy for overpaid corporate executives who couldn’t care less about the stewardship of their company’s financial future. They receive a check every week whether the company is successful of not! They are under contract for X amount of dollars whether their job performance helps or hurts a company. Lee Iacocca should be the standard to which CEO’s are held demonstrating how competent leadership can result in pulling a company (that just happens to be an Auto-Maker) out of the Red and into positive cash flow territory.
“In or out of court, automakers will have to submit a viable business plan to gain government funds, Peter Peterson, senior chairman of Blackstone Group LP, said in an interview.
“Unless they can show us the plan, we can’t show them the money,” Pelosi said yesterday.
GM, Ford and Chrysler must submit viability plans by Dec. 2, and Congress would meet the week of Dec. 8 to consider aid, Senate Majority Leader Harry Reid said yesterday. Congress must see accountability from automakers, Pelosi said.
The congressional deadlock was triggered by disagreement over how to pay for the $25 billion the Big Three automakers are seeking.”
So before distressed homeowners and the jobless here is what a consensus of Democrats said:
” Democratic leaders have demanded that the recently approved $700 billion bank-rescue fund be tapped for the auto aid. Their plan stalled with opposition from Republicans and President George W. Bush`s administration.”
When the obvious conclusion is staring you in the face. The Financial problems of the Auto-Makers emanate from the TOP . (not from the People!)
If we ever needed a “prowl” to blizzard the Democratic Congress, it’s now! If they don’t intend on asking for the People’s input on spending our money, then we had better tell them…It’s PEOPLE FIRST, when it’s first, the People’s Money!
“NO BAIL-OUT”
UPDATE:
Here comes the EU putting in their two cents:
“Frankly, it’s stones and glass houses,” said Garel Rhys, professor of automotive economics at Cardiff Business School in Wales. “Everybody has been at this game for their own interests; nobody is pure.”
article
UPdate #2 Pelosi-Reid Letter to the 3 AutoMakers:
November 21, 2008
Dear Messrs Wagoner, Mulally, and Nardelli:
We recognize the importance of the domestic automobile industry and are committed to working with you to ensure its viability in the years to come. One in 10 American jobs is related to auto manufacturing; our national security depends on the industry’s technologies and manufacturing capacity; and our competitiveness in a global economy depends on its pursuit of excellence.
As you know, Congress has provided President Bush, the Chairman of the Federal Reserve, and the Treasury Department the authority they need under the Emergency Economic Stabilization Act (EESA) as well as other authorities to provide short-term financial assistance to the auto companies.
Unfortunately, the Bush Administration and the Federal Reserve have thus far declined to use their powers to improve our nation’s financial stability by assisting the auto industry. Notwithstanding existing authorities, this Congress is prepared to consider additional legislation that would give the assistance you seek, provided that you submit a credible restructuring plan that results in a viable industry, with quality jobs, and economic opportunity for the 21st century while protecting taxpayer investments.
In order for Congress to act in a timely manner, this plan must be presented to Congress by December 2nd, specifically to Senate Banking Committee Chairman Christopher Dodd and Financial Services Committee Chairman Barney Frank.
It is critical that you meet this deadline since we have announced we are prepared to come back into session the week of December 8 to consider legislation to assist your industry. We intend to give pertinent agencies within the executive branch, the Government Accountability Office, the Board of Governors of the Federal Reserve, as well as outside experts, the opportunity to comment on your work.
The plan must:
Provide a forthright, documented assessment of the auto companies’ current operating cash position, short-term liquidity needs to continue operations as a going-concern, and how they will meet the financing needs associated with the plan to ensure the companies’ long-term viability as they retool for the future;
Provide varying estimates of the terms of the loan requested with varying assumptions including that of automobile sales at current rates, at slightly improved rates, and at worse rates;
Provide for specific measures designed to ensure transparency and accountability, including regular reporting to, and information-sharing with, any federal government oversight mechanisms established to safeguard taxpayer investments;
Protect taxpayers by granting the most senior status for any government loans provided, ensuring that taxpayers get paid back first;
Assure that taxpayers benefit as corporate conditions improve and shareholder value increases through the provision of warrants or other mechanisms;
Bar the payment of dividends and excessive executive compensation, including bonuses and golden parachutes by companies receiving taxpayer assistance;
Include proposals to address the payment of health care and pension obligations;
Demonstrate the auto companies’ ability to achieve the fuel efficiency requirements set forth in the Energy Independence and Security Act of 2007, and become a long-term global leader in the production of energy-efficient advanced technology vehicles; and
Require that government loans be immediately callable if long-term plan benchmarks are not met.
The auto companies’ shareholders, business partners, and prospective benefactors—the American people—deserve to see a plan that is accountable to taxpayers and that is viable for the long-term. In return for their additional burden, taxpayers also deserve to see top automobile executives making significant sacrifices and major changes to their way of doing business.
We look forward to working with you to ensure a viable American automobile manufacturing sector for decades to come. If we are successful, we can ensure a brighter future for the automobile industry, our nation, and our planet.
Thank you for your prompt attention to this matter.
Sincerely,
Nancy Pelosi
Speaker of the House
Harry Reid
Senate Majority Leader
