WASHINGTON (AdAge.com) -- The White House today said "substantial progress" has been made on reaching a "conceptual agreement" for a $15 billion bridge loan for automakers, and outlined a change in the draft legislation that would amend the role of a "car czar" to approve expenses of $100 million rather than the initially cited $25 million.
At a press conference today, Sens. Richard Shelby, R-Ala.; John Ensign, R-Nev.; Jim DeMint, R-S.C.; David Vitter, R-La.; Tom Coburn, R-Okla., raised their rhetoric, saying that any bailout of the Big Three automakers is unwarranted. They said they will join with Sen. Bob Corker, R-Tenn., to offer an alternative to any bailout legislation that will apparently require auto-industry restructuring.
'Wasting our time'
"Unless these companies are materially restructured, we are wasting our time keeping these companies alive," Mr. Shelby said. He added that any money spent now to help the auto companies would be a "bailout on billions to come. It postpones the inevitable. This is a mistake."
Mr. Ensign said Congress needs to insist on a restructuring of the companies before committing federal resources. "If we don't have the forced restructuring plans in place, many of us don't believe we will come out of this in a competitive position," he said. Added Mr. Vitter: "This puts the cart before the horse."
The Republican senators' comments came as White House Press Secretary Dana Perino suggested the final agreement on a package that would give General Motors, Chrysler and possibly Ford up to $15 billion in "bridge financing" -- a short-term loan -- could be imminent, though a final vote may not take place until this weekend.
"We've made very substantial progress and have a good conceptual agreement," she said. "There's still a lot of drafting going on up at Capitol Hill and language being exchanged back and forth, so I don't want to say there is agreement, because there's never agreement until you've actually seen the text and know what's in there and what the members may be called upon to vote on, but, as I say, very good progress on a conceptual agreement."
Quick appointment for car czar
White House deputy chief of staff Joel Kaplan said that if the legislation is enacted, President George Bush would expect to act swiftly to sign it. He would also quickly appoint an auto czar who would bring together all stakeholders of any manufacturer that receives federal financing -- creditors, dealerships, bond holders, labor unions and management -- to develop a long-term plan for the carmakers' viability even as temporary loans are extended.
According to White House officials, the role of the car czar is changed in the final draft of the legislation. Instead of the czar reviewing expenditures of $25 million or more as initially stated, the final draft will likely authorize the czar to review expenditures of more than $100 million, which would mean a lot less oversight of media buys than originally stated.
According to the new draft bill, the auto czar would have to review any "asset sale, investment, contract, commitment or other transaction proposed to be entered into by such eligible automobile manufacturer that has a value in excess of $100 million."
Mr. Kaplan said the czar's role is would not be to run the carmakers but to force them to come up with a plan to cut costs for long-term viability.
"It's not the intention in this bill [for] this president's designee to run the private companies," he said. "This is not somebody who's going to run the companies. It is somebody who is going to be empowered to bring them around a table, knock heads and tell them, 'If you want assistance from the taxpayer going forward, you're going to have to make some difficult concessions.'"