DETROIT (AdAge.com) -- Congress submitted a draft rescue bill to the White House late today calling for federal loans to Detroit's three carmakers before the end of the year.
But General Motors Corp., Chrysler and Ford Motor Co. would face strict rules under the proposed legislation, including opening their books for review by a "car czar," to be named by the president to oversee the loans, make payouts and review the companies' progress. Any of the three car companies that accept the loans are banned from granting bonuses or incentive compensation to their top 25 executives.
Feinberg likely for czar post
Attorney Kenneth Feinberg, who ran the federal Sept. 11 victims' fund, has surfaced as a contender for the car-czar post, according to news reports. The czar will authorize amounts and disbursements to the carmakers, as well as report to Congress at least every 15 days on their progress. Any automaker getting a loan will have to get the czar's OK for any expenditure or transaction over $25 million, which would include large media buys.
In exchange for the expedited loans, each Detroit carmaker would have to file a long-term viability plan by March 31.
"While we take no satisfaction in loaning taxpayer money to these companies, we know it must be done," Senate Majority Leader Harry Reid, D-Nev., said in a statement. "This is no blank check or blind hope." He said: "If the companies fail to come up with a plan that will lead to long-term competitiveness and profitability, or if they fail to stick to that plan, the loan can be recalled."
GM was first to pull the trigger on a statement in reaction to the bill: "As part of our plan, we will abide by the conditions proposed in the bill and will continue our restructuring with great urgency. Millions of jobs, America's manufacturing base and future competitiveness hang in the balance and we urge quick passage of this bill."