November 17, 2008

Congressman Gregory Meeks Supports House Auto Legislation to Bailout U.S. Auto Industry

(WASHINGTON, DC)–Today, the House Financial Services Committee introduced legislation to help bailout U.S. automakers that are struggling financially by establishing both a short term and long term plan to help make financial ends meet for many of the major U.S. auto manufacturers.

This bill intends to help provide short term help to the U.S. auto industry while protecting the American taxpayer. Congress has allotted for $25 billion in bridge loans, issued under the recently enacted Troubled Asset Relief Program (TARP), which will help those automakers that are having great financial difficulty to survive.

With this new bill money is set aside for financially troubled automakers to help them while they prepare plans to restructure their companies to build more competitive, fuel-efficient and technologically-advanced vehicles. Taxpayers are heavily protected under this legislation by limiting executive compensation, banning dividend payments over the life of loans, having rigorous independent oversight present and allowing taxpayers to greatly profit in any upside of the restructuring.

The U.S. auto industry heavily impacts the average American taxpayer. For every ten American jobs there is one that is linked to the auto industry. Across all 50 states GM, Ford and Chrysler support about 5 million American jobs, including auto parts manufacturers and auto dealers. If the American auto making industry collapsed an estimated 3 million jobs would be lost in the first year, which is three times the rate of the job loss this year. More than 1 million American workers and retirees are directly employed or supported by major automakers and 2 million Americans receive health care benefits through the auto industry.

For automakers to qualify for the Short-term Operating plan they must submit a short term operating plan that describes the intended use of loans and commitment of resources to develop a long term restructuring plan and repayment of the loan to taxpayers with interest. By March 31, 2009 those automakers who became recipients of the loan submit an acceptable restructuring plan to the Department of Treasury for long term viability, international competitiveness, meeting fuel efficiency standards and advanced technology vehicle manufacturing.

“With the continuing loss of American jobs due to the severe economic crisis it is imperative that Congress do everything in their power to ensure more Americans can keep providing for their families. The U.S. auto industry is a major component of not just our domestic income, but our international income as well. The proposed outcomes of this bill will strengthen both the U.S. auto industry and our entire economy during a very severe financial crisis. I believe that money does need to be allotted to the U.S. auto industry, but not without stringent conditions. It is critical that there needs to be oversight and high competitive fuel standards. The auto industry in Detroit needs to ensure that we have the quality of cars to compete in a rising international auto market. I am confident that this bill will help prevent millions more Americans from becoming unemployed and be a needed boost to our economy,” said Congressman Meeks.

Now serving in his sixth full-term, Meeks was elected to the House on February 3, 1998. Representing New York's Sixth Congressional District in the United States House of Representatives, Meeks' district covers all towns of Southeast Queens, Far Rockaway and Howard Beach. He is a member of the House Committee on Financial Services and the Committee on Foreign Affairs.  Meeks is a Member of the Congressional Black Caucus (CBC), New Democrats Caucus and the Democratic Leadership Council (DLC).  He serves as the Co-chair of the Malaysia Caucus, Services Caucus, Dialogue Caucus and the Middle East Economic Partnership Caucus. 

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