US car manufacturers will be strictly monitored by federal authorities under a draft of the government rescue package that has been made public. They would also have to drop lawsuits against California’s emissions laws.
The document reveals that there is no agreement on the final amount of money to make available to the car firms. Some lawmakers want to lend more than $15 billion to Detroit’s Big Three - who originally asked for $34 billion.
GM, Ford and Chrysler would have to submit a restructuring plan to a government-picked ‘financial viability advisor’ by 31 March.
The advisor will have the power to reject the plan or start negotiations between the company, workers unions and creditors. This restructuring is expected to lead to thousands of job losses.
Detroit’s Big Three and other global motor manufacturers have long taken legal issue with California’s greenhouse gas laws, which they say create unworkable sales conditions and complicate manufacturing. The on-going dispute would have to be dropped.
The Big Three would be barred “from participating in, pursuing, funding, or supporting in any way, lawsuits (existing or contemplated) challenging State laws concerning greenhouse gas emission standards.”
It’s now looking likely that a deal will soon be reached between the White House and congress officials.
But there’s still a long way to go before the bill becomes reality. The US Senate must pass it. A significant number of sceptical Republican votes will be needed for it to get through.
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Re: Big Three bailout plan revealed
Chrysler seem to me to be in the biggest trouble of the three. Whilst GM say they will "run out of money" shortly, Chrysler were offloaded by Daimler from their merger that was really a take over and now nobody wants to take it on. I've owned three newer Chryslers and have been happy with everyone one of them. It seems the company (and perhaps this applies to GM and Ford too) just needs new money and new ideas. The question is: where from? I see the link on the Autocar news pages to a possible tie up between Renault-Nissan and Chrysler as a possibility but would that really solve their problems?