U.S. automakers will address Congress in hearings today concerning a proposed $25 billion bailout to help the companies stay alive as their sales continue to plummet.
The big three automakers–GM, Chrysler and Ford–already have access to $25 billion in loans approved by Congress at the end of the summer. But they say it isn’t enough in the current economic situation and they are hoping to acquire some of the $700 billion set aside by Congress last month for rescuing the failing economy. They say additional funds are needed, in part, to help transition to the production of more fuel efficient vehicles.
Senate Democrats yesterday proposed the $25 billion package that includes restrictions on executive compensation, but the president and many Republicans and Democrats are opposed to giving more money to the auto industry, despite its position at the center of the American economy.
Environmentalists are hoping that any funds will be given with strings attached, requiring the automakers to drop their lawsuits against California’s regulations for higher fuel efficiency standards.
Aides to president-elect Barack Obama are reportedly helping to draft a separate rescue plan for the industry that could include the creation of an "auto czar" post, or an oversight board for the industry. However, it is unlikely that any major legislation will pass before the lame duck Congress comes to an end.
In Related News…
The Wall Street Journal reported that several major utility companies are considering ordering thousands of plug-in electric vehicles from the U.S. automakers in an effort to keep the technology afloat, which, if widely adopted, will greatly benefit the electricity industry.
But with the economy in recession, there are fears that the future of electric vehicles, which are years away from profitability, according to the big auto manufacturers, may not survive.
Follow the link below to the Reuters story "Will Detroit’s Cash Crisis Kill the Electric Car?"
Loading...