If the unions don't allow the auto companies to become competitive, then this whole bailout exercise will be nothing more than a severance package for unions workers. It appears that Congressman Frank doesn't comprehend that people will still not buy the ailing companies product until they match the value of the leading sellers and you won't get value until the big three are able to streamline operations, put manufacturing costs in order, and have a motivated and reliable work force.
Auto loan terms could drop UAW givebacksHouse Dems to vote on changes next weekBY JUSTIN HYDEFREE PRESS WASHINGTON STAFF
WASHINGTON -- Concessions forced on the UAW could be stripped from a $17.4-billion auto industry rescue plan, even as companies and the union would have to answer to a stronger car czar, under a bill unveiled Friday that House Democrats plan to vote on next week.
The proposed changes, revealed by U.S. Rep. Barney Frank, D-Mass., come as part of an effort to toughen the $700-billion financial industry bailout and release the second half of its money into a struggling U.S. economy.
Frank's bill would force more help for homeowners facing foreclosure and stricter reporting rules on banks and financial firms that receive federal aid.
While the bill has the backing of House Speaker Nancy Pelosi, D-Calif., and therefore a strong chance of passing the House, its prospects in the Senate are unknown. Frank said that if it passed the House with a large majority, but failed in the Senate, he'd be willing to accept the word of the Obama team "that they will act as if it were law."
The bill also would require the Obama administration to decide by Feb. 1 what terms the automakers, unions and creditors must meet to keep whatever loans they have and get any additional aid. The companies would then have until March 31 to show the new administration's car czar that they are making sufficient progress.
It makes no mention of a Feb. 17 deadline that the Bush administration set in the loans for commitments from the UAW and the automakers toward restructuring goals.
Frank's bill also avoids any of the terms that angered the UAW last month, namely pushing the union to accept pay, benefits and work rules that match those of workers at foreign-owned plants in the United States. The union was also tasked to take half of the money owed by the companies for a retiree health care trust in stock, and calling on the automakers to cut their total debt by two-thirds.
The Obama administration's auto czar would be free to keep those terms on the union, but Frank called them an "unfair assault on working men and women" last month and vowed to change them.
The bill would not only apply to the $13.4-billion loan to General Motors Corp. and the $4 billion lent to Chrysler LLC, but also to any line of credit sought by Ford Motor Co., which had said it would seek a $9-billion emergency backstop.
Under the current loans, Treasury Secretary Henry Paulson oversees the automakers' progress on restructuring, and the Bush administration has maintained that if the automakers can't prove viability they should enter bankruptcy.
But the Frank bill would make the car czar a higher-profile job, requiring that the one or more people in the role have experience in financial and environmental issues, and broader power to decide how the automakers meet their goals.
ABC News reported late Thursday that the Obama administration was considering Steven Rattner, head of the $6-billion private investment firm Quadrangle Group, for the role of car czar.
Rattner, who was a reporter for the New York Times before starting a career in finance, has mostly been known for assembling news media and telecommunications deals. The New York Post reported Friday that Quadrangle was caught in a dispute with Cerberus Capital Management, whose ownership of Chrysler would fall under any czar.
The Post said Cerberus loaned Quadrangle $125 million two years ago toward the purchase of the company that publishes Maxim magazine, among others. As the economy has worsened, Cerberus has pressed Quadrangle for equity in the publisher, and when Quadrangle refused, dubbed the loan in technical default.
Quadrangle and Rattner had not responded to calls for comment Friday afternoon. An Obama spokesman also declined comment.
Rattner raised more than $100,000 for Obama's campaign during the election. He is married to Maureen White, the former finance chairwoman of the Democratic National Committee.
Michigan lawmakers have said that whether Obama chose a car czar was less important than having at least one cabinet member with a deep understanding of manufacturing.
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