Demacratic leaders want Bush to help automakers

Nancy Pelosi and Harry Reid recently told Henry Paulson (Treasury Secretory) in a letter that the administration should expand the bailout to auto industries.

"A healthy automobile manufacturing sector is essential to the restoration of financial market stability, the overall health of our economy, and the livelihood of the automobile sector's work force," they wrote. "The economic downturn and the crisis in our financial markets further imperiled our domestic automobile industry and its work force."
The administration did not offer a direct comment on the request to expand the $700 billion bailout however Treasury Department spokeswoman Brookly McLaughlin said the department is working on ways to most effectively uses the remaining dollars in the rescue to strengthen the financial system and get lending moving again.
Auto maker want a $50 billion dollar loan from congress to pay for health care obligations for retirees. The companies seek loans as part of an economic rescue plan that is likely to come together next year.
Top executives of General Motors, Ford, Chrysler LLC and the president of the United Auto Workers met with congressional leaders Thursday to discuss the loans. The money would add up to the $25 billion loans that congress passed in September in a attempt to create for fuel efficient vehicles.
"We left the meetings convinced that our nation's automobile industry — the heart of our manufacturing sector — and the jobs of tens of thousands of American workers are at risk," Pelosi and Reid said in their letter to Paulson.
Automakers want the loan as part of an economic rescue plan. More loans would probably come with strings attached however. Include limits on executive compensation, awarding the government preferred stock in the companies and a suspension of dividend payments to investors are potential protections.
GM, the largest automaker, warned that they may run out of money by next year because of billion dollars in losses. GM plans to make job cuts to another 5,500 factory workers. Although company officials warn that these measures would not be enough and that federal aid is necessary.
"We must safeguard the interests of American taxpayers, protect the hundreds of thousands of automobile workers and retirees, stop the erosion of our manufacturing base, and bolster our economy," the Democratic leaders in Congress wrote.
President-elect Barrack Obama said his team would explore options to help the auto industry. Obama's team includes two allies of the auto industry — Michigan Gov. Jennifer Granholm and former U.S. congressman David Bonior, a Michigan Democrat. Obama takes office in January.