WASHINGTON — Democratic leaders ordered Detroit’s Big Three automakers Friday to submit what amounts to a detailed loan application to Congress so lawmakers can decide whether to give the beleaguered industry an emergency $25 billion lifeline.
In a letter released Friday, House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid demanded a detailed accounting by Dec. 2 of the companies’ financial condition and short-term cash needs, as well as how they would achieve long-term viability.
"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," Pelosi, D-Calif., and Reid, D-Nev., wrote.
The Democrats also called on the automakers to show how they would ensure that the government would be reimbursed and share in future profits, eliminate dividends and lavish executive pay packages, meet fuel-efficiency standards and address their health care and pension obligations if they got the federal help.
The Bush administration sharply criticized the Democrats for departing Washington for a recess without acting on a rescue for the car makers.
"How could they leave town when the auto companies were just here (this) week saying some of them were on the verge of running out of cash?" Commerce Secretary Carlos Gutierrez said. "I think it’s a very irresponsible attitude toward a very serious matter."
Detroit’s car makers employ nearly a quarter-million workers, and more than 730,000 other workers produce materials and parts that go into cars. If just one of the automakers declared bankruptcy, some estimates put U.S. job losses next year as high as 2.5 million.
Hearings are expected the week of Dec. 1 and lawmakers could consider legislation the following week, but only if the industry shows that taxpayers and auto workers would be protected, congressional leaders said.