Reid, Pelosi To Automakers: Prove You're Good For The Money

November 22, 2008 1:14 p.m. EST

Washington, DC (AHN) - Democrats in Congress told Big Three automakers to submit a plan by Dec. 2 detailing how they intend to rebuild their companies and pay back loans. The plan is essential if the automakers expect any federal money to help them out as they face bankruptcy.

"It is critical that you meet this deadline since we have announced we are prepared to come back into session the week of Dec. 8 to consider legislation to assist your industry," Senate Majority Leader Harry Reid (D-NE) and House Speaker Nancy Pelosi (D-CA) said in a Nov. 21 letter to automobile executives.

Reid and Pelosi wanted to give Ford, GM and Chrysler $25 billion of the $700-billion federal bailout package passed by Congress in October. But the Bush administration and mostly Republican members of Congress were opposed. Chances of acting on the proposal became even more remote after it was revealed that executives for the companies flew to Washington on expensive private jets to testify to Congress on how cash-poor their industry is.

GM, Ford and Chrysler spent nearly $18 billion in cash last quarter and analysts have said GM and Chrysler could be out of money by early 2009.

Reid and Pelosi pulled the plug on a last-minute compromise rescue plan backed by Michigan's senators, key Republicans and the Bush administration, because they said the bill lacked the votes in either the Senate or House to pass. That plan called for giving $25 billion in loans to automakers now for making fuel efficient vehicles.