WASHINGTON -- Democratic leaders of Congress indicated this evening they have reached agreement on a bailout plan for the Detroit 3.
The accord is designed to provide short-term loans to General Motors, Ford Motor Co. and Chrysler LLC to prevent an industry collapse and allow a comprehensive restructuring of the companies early next year, House Speaker Nancy Pelosi, D-Calif., said in a statement.
Congress is scheduled to vote on bailout legislation next week.
Democratic leaders also have reached agreement with the White House on the plan, a senior congressional aide told Reuters. The package totals between $15 billion and $17 billion, the aide said, speaking on condition of anonymity.
Pelosi suggested she was willing to fund the emergency loans out of a $25 billion package already approved to help automakers retool for fuel-efficient vehicles. Pelosi and Senate Majority Leader Harry Reid, D-Nev., had previously opposed that approach, which is favored by the Bush administration.
Under the agreement, Pelosi said she would demand "a guarantee that those funds would be replenished in a matter of weeks" and that automakers would not delay work on improved fuel economy.
The loans would allow the Detroit 3 to maintain operations until President-elect Barack Obama takes office Jan. 20.
Taxpayer protection
At hearings this week, GM CEO Rick Wagoner and Chrysler CEO Bob Nardelli said that without a combined $11 billion in emergency loans by year end, they would not have enough money to meet their financial obligations.
That funding was part of a $34 billion request for loans and credit lines.
Pelosi said that "Congress will insist that any legislation include rigorous and ongoing oversight to guarantee that taxpayers are protected."
The New York Times quoted Reid as saying he expected House and Senate "votes next week on a responsible plan to help the millions of Americans who rely on a healthy auto industry for their livelihoods."
But Reid added: "We will need support and cooperation from Republicans to determine what that vote happens and whether it will succeed."
Ford said in a statement Friday night that it is "encouraged" by the promise of congressional votes next next week.
As recently as Thursday, Pelosi and Reid had insisted that the Bush administration make the emergency loans to the Detroit 3 out of a $700 billion rescue fund for financial institutions. The administration said it did not have that authority.
Consensus built for an interim rescue package after more than five hours of testimony today before the House Financial Services Committee.
Committee Chairman Barney Frank, D-Mass., said he was "more optimistic than before" that GM and Chrysler would get enough federal loans to live until next year when the Congress and the Obama administration can take up a more complete rescue measure.
That package could be completed with stringent government oversight, milestones and possibly equity rewards for the risk of lending the money, Frank said.
He said failure to act immediately would be an "unmitigated disaster" for an already-fragile U.S. economy.
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Ford Motor Co. CEO Alan Mulally said his company doesn't immediately need loans but is supporting GM and Chrysler to prevent a failure and the consequential collapse of the domestic parts supply base. Ford says it may need $9 billion if one of its rivals doesn't survive.
The Detroit 3 CEOs and UAW President Ron Gettelfinger testified to Congress for a second consecutive day Friday.
Responding to lawmaker questions, Chrysler's Nardelli said a $4 billion interim package would suffice for his company. Wagoner said GM needs about $4 billion by January and up to $10 billion through March.
