Lawmakers Warn Automakers Must Improve Fuel Efficiency If They Want Bailout

Washington, D.C. (AHN) - The collapse of auto sector could threaten jobs of millions of people in the United States, House Speaker Nancy Pelosi said Saturday.

"Recognizing the severe challenges facing the domestic automobile industry, whose failure could jeopardize millions of jobs here at home and have a devastating impact on our economy," Pelosi said in a statement.

House Democrats are preparing to rescue the ailing auto sector, which would also push the automakers to adopt new fuel-efficiency standards and produce advanced vehicles, according to lawmakers.

"The House Democratic bill will provide immediate, targeted assistance to allow the carmakers, together with affected unions, time to develop a plan to assure the long-term viability of the industry," Pelosi added.

Speaker Nancy Pelosi suggested that the auto sector could receive immediate short-term assistance from $700 billion under the Troubled Assets Relief Program (TARP) recently authorized by Congress.

She did not provide a specific amount that would be provided under the latest bill, but reports suggest that General Motors Corp. (GM) alone would cost the government as much as $200 billion if it collapses.

In the month of September, the U.S. House of Representatives approved $25 billion auto industry loan package to help the sector companies meet new federal fuel-efficiency standards and manufacture more fuel-efficient cars.

The loan will be provided to the industry over the period of three years and would support the sector during the on-going financial crisis.

"Any effort to divert funds from the advanced technology initiative contained in section 136 of last year's energy bill is a step backward in assuring the viability and competitiveness of the U.S. auto industry," Pelosi said. "A restructured, competitive American automobile industry will continue to play a crucial role in our national economy and in the global marketplace."

Pelosi emphasized that after receiving government's aid the companies have to deploy advanced vehicle technologies required to compete in the domestic and global market.