The funds would be distributed by a single overseer, dubbed 'car czar' by politicosEnlarge Photo
The heads of the Detroit 3 headed to Washington earlier this month in the hope of securing a second emergency aid package to supplement the previously earmarked $25 billion
for more efficient vehicles to meet looming CAFE regulations. Unfortunately for the carmakers, top Democratic legislators, including House Speaker Nancy Pelosi, rejected the proposed bipartisan compromise that would have provided the additional funds. Now the car chiefs will be headed back to Washington December 5 to present their case once again.
The House Financial Services Committee will hold a hearing beginning at 9:30am EST. The members that rejected the previous plan said the Detroit 3 had failed to convince Congress that their companies could be made viable with additional aid, reports Automotive News. Should the officials be satisfied that Detroit has its plans in order, legislation providing the funds could be introduced on December 8.
Speaking at a meeting last week, Pelosi said: “Until they show us a plan, we can't show them the money."
No funds from the first loan package have yet been disbursed, and the new funds were to be targeted more at economic stimulus than green-technology subsidization, though any funds available to Detroit carmakers at this point will be used in any way possible to keep the companies afloat.
With sales at 25-year lows and continuing to fall, it's clear that something must be done. If the carmakers in the U.S. were to simply cease their North American operations, it would result in the loss of about 3 million jobs within the year. That's the sort of snowball-effect economic disaster that would lead to even worse consequences than are already predicted for the faltering U.S. economy, and a threat of that magnitude will almost certainly necessitate government intervention.