Auto loan has strings attached
Detroit skyline with General Motors headquarters standing tallest
TEXT OF INTERVIEW
Steve Chiotakis: By the end of the day, there could be -- could be -- a vote to rescue the beleaguered auto industry -- $15 billion in short-term loans with strings attached.
Oh, the strings. A restructuring deadline for one. Come the end of March, automakers would have to have a plan for the future. Something to help it survive and even thrive in the fallout from the financial crisis. Then there's the "car czar," someone who would oversee the plan.
We're joined by Marketplace's Dan Grech. Dan, where are we in negotiations and what's next?
Dan Grech: Well, first a plan has to get past Congress, Steve, and that's not going to be an easy task. The House could pass the plan as early as this afternoon, but it's Senate Republicans that could be a road block. There's one senator in Nevada who hates the idea of the car czar -- he says it invests way too much power in a political appointee. And then you have another senator, a Republican senator from New Hampshire, who wants the car czar to have more power so he or she could dictate terms to the automakers. So it's a little bit of a mess in the Senate, and since Democrats themselves aren't unified, it'll take 13 to 15 Republicans to get this thing passed.
Chiotakis: Mmhmm, yeah, it seems like we've been hearing a lot about negotiations. Anything new that popped up overnight?
Grech: Well, the biggest change from yesterday to today is the White House now backs this deal. And there were a couple things that happened that got the White House behind it. One of them is the car czar is going to have veto power over transactions of $100 million rather than $25 million -- the White House felt that the $25 million number was a little bit like micromanaging these companies. One of the other things that's been coming out is this is a lot of stick and not much carrot. The car companies are going to be basically agreeing to a partial nationalization for a four-month lease on life. And then of course the loans are just for $15 billion, which is less than half of what they asked for.
Chiotakis: Marketplace's Dan Grech. Thanks.
Grech: Thank you, Steve.