WASHINGTON – Auto-parts makers are requesting access to the government's $700 billion financial-industry rescue fund, and Democratic lawmakers are planning tough conditions — including a government oversight board — on a proposed aid package for Detroit's troubled auto companies.
Democratic lawmakers Monday plan to unveil a bill that would give the Big Three auto makers access to the $700 billion Troubled Asset Relief Program set up in October to help ailing banks and other financial firms. As written, the legislation wouldn't include auto-parts makers.
Parts makers are seeking to change that in a letter signed by nearly 100 companies and being sent to the House and Senate on Monday. In the letter, the Motor and Equipment Manufacturers Association, a trade group, will ask that its members get equal access to TARP funding sought by the car makers.
General Motors Corp., Ford Motor Co. and Chrysler LLC are seeking $25 billion of new loans, on top of $25 billion already approved for loans. The latter were intended to help the car makers retool their fleets and make more energy-efficient vehicles.
Lawmakers and congressional aides said the bill to assist the auto industry will include more-stringent limits on pay for auto executives than have been imposed on executives of finance firms using the TARP funds. TARP rules bar firms from giving "golden parachute" exit payments to certain executives and restrict compensation above $500,000 from being tax-deductible.
The legislation would require the auto makers and their unions to draw up plans on how the companies would return to financial health in the longer term.