What follows are excerpts from a CNNMoney.com article on the House bill:
The House vote came in the wake of an agreement on the measure earlier in the day between Democratic Congressional leaders and the Bush administration.
The bill is designed to keep General Motors and Chrysler out of bankruptcy through at least March to give the new Congress and Obama administration a chance to craft a more long-term solution.
The measure passed by a count of 237 to 170 thanks to overwhelming Democratic support. But only 32 Republicans joined Democrats in voting for the bill.
During the House debate, Democrats and Republicans from Michigan both expressed heavy support for the bailout. But virtually all other Republicans who spoke during the debate argued that it would not solve the problems dogging the industry. The White House so far has failed to generate support among Senate Republicans, who have the power to kill the bill when it shows up in the Senate.
The $14 billion is $1 billion less than what was being discussed earlier in the week, and less than half the $34 billion requested by automakers last week. Still it may well be enough to stave off the immediate threat of bankruptcy.
GM has said it needs $4 billion by the end of the month to continue operations, and believes it'll need an additional $6 billion in the first three months of 2009. Chrysler has said it needs $4 billion by the end of the first quarter.
Ford Motor, which has more cash on hand than its U.S. rivals, is not expected to tap into this bailout in the coming months.
The stopgap measure is designed to let the new Congress and incoming administration of President-elect Barack Obama to craft a longer-term solution. It would also give the companies time to negotiate with creditors and the United Auto Workers union on additional concessions needed to stem their ongoing losses.
But the bill also sets strict oversight of the companies. There would be limits on executive pay, prohibitions for so-called golden parachutes and requirements that the automakers get rid of their corporate aircraft and not pay dividends while loans are outstanding.
The bill also provides for a presidential appointee, popularly referred to as a "car czar," to oversee the company's efforts to restructure their operations. If the car czar determines that the companies have not made progress on cutting costs, the loans would be recalled within 30 days.
In addition, the government would receive warrants - the right to buy a stake in the companies at a certain price - equal to 20% of the loan's value.
plez sez: horse whoo-ee! the house democrats have lost their collective minds.
fourteen billion dollars is not going to save detroit... not even for a couple of weeks! this is putting the proverbial band-aid on a cancer. one of the big three is going down and they'll be taking $7-10 billion of our dollars with them.
this is a market correction exacerbated by this recession. one of the big three is not supposed to survive and a lifeline is not going to save them. and because of this act, the house democrats may be looking at BARACK OBAMA presiding over the demise of the US auto industry as we know it, instead of them failing on george bush's watch!
the mortgage companies that got fat and then got skinny with those sub-prime loans... got a bailout!
the wall street brokerage houses that got fat and then got skinny propping up those sub-prime loans for the mortgage companies... got a bailout!
the US auto manufacturers got real fat and are now looking really skinny after foisting their "less than stellar" wares on a US public that now has numerous alternatives to their shitty products... is halfway there to getting a bailout!
the 1.7 million people - like plezWorld - who worked hard but watched their jobs blow away like sand on a hurricane ravaged beach since the recession began in December 2007 (there were 533,000 job losses in November 2008 alone)... get no relief, get no sympathy, and damn sure get NO BAILOUT!
who's next? what is the next industry with a powerful lobby in washington, dc that is going to belly up to the goodwill trough in congress. we're staring at over one trillion dollars in bailout cash heading to special interest groups without ONE PENNY of relief to the people who pay their taxes. there is something wrong with this picture... something is eerily wrong here!
i will be contacting my senators to urge them to vote against ANY bill that bails out the auto industry! i'll be checking tonight to ensure that my congressman (rep. hank johnson) voted against this bill.
Read and download a draft version of the auto industry bailout bill here.
Read the New York Times article about House passage of the bill.
Read the CNNMoney.com article about the bailout legislation.
Read the November 2008 Bureau of Labor Statics report and then see if you support floating GM and Chrysler for another two or three months before they come back to washington looking for another handout.