WASHINGTON – A bailout plan for the failing U.S. auto industry could include a Cabinet-level oversight board and a provision to withdraw the money if the overseers decide the companies are failing to take steps to overhaul themselves.
The plan would draw the emergency aid from an existing loan program meant to help the automakers build fuel-efficient vehicles. The size of the package hasn't been finalized, but it is expected to be about $15 billion, several congressional aides said.
It would create a board composed of Cabinet secretaries from the departments of Treasury, Energy, Labor, Commerce and Transportation plus the Environmental Protection Agency administrator to oversee a broad auto industry restructuring. A congressional aide outlined the emerging measure on condition of anonymity because it is not yet completed.
In return for the money, the carmakers would have to agree to terms similar to those placed on banks that receive funds under the $700 billion Wall Street bailout: to limit their top executives' pay packages, cease paying dividends, give the government a chunk of future gains and guarantee that taxpayers would be reimbursed before any other shareholders, the aide said.
The bill under discussion would place the special investigator overseeing the bank rescue in charge of keeping tabs on the auto bailout.
The White House and Democratic congressional leaders are narrowing their differences over the auto bailout, but had yet to agree on specific legislative details, officials said.
Sen. Chris Dodd, D-Conn., chairman of the Banking Committee, said Sunday that General Motors Corp.'s chief executive, Rick Wagoner, "has to move on" as part of a government-run restructuring.
"I think you have got to consider new leadership," Dodd said on CBS' "Face the Nation."
Criticized for staying on the sidelines until now, President-elect Barack Obama voiced support Sunday for the bailout legislation being drafted in Congress. He accused car industry executives of a persistent "head-in-the sand approach" to long-festering problems.
In an appearance on NBC's "Meet the Press," Obama said Congress was doing "the exact right thing" in drafting legislation that "holds the auto industry's feet to the fire" at the same time it tries to prevent its demise.
GM spokesman Steve Harris said the company appreciates Dodd's support for the loans, but added, "GM employees, dealers, suppliers and the GM board of directors feel strongly that Rick is the right guy to lead GM through this incredibly difficult and challenging time."