U.S. Rep. Charlie Dent (PA-15) tonight voted against HR 7321, the Auto Industry Financing and Restructuring Act, a “bridge loan” of $14 billion to the Big Three automakers that required no concise plans for restructuring for the long-term viability of the companies. Congressman Dent issued the following statement:
“As the son of a 30 year Bethlehem Steel employee affected by the demise of that once mighty company, I can indentify with the plight of the auto workers, their families, and the numerous small businesses involved in this difficult situation.
“Tonight, the U.S. House of Representatives passed the Auto Industry Financing and Restructuring Act (H.R. 7321). This bill provided $14 billion in loans to the nation’s three automakers, commonly referred to as the Big Three (Chrysler LLC, Ford Motor Company and General Motors). After careful deliberation, I opposed this legislation.
“In late November, executives from each of the three domestic automakers testified before the House Committee on Financial Services on the perilous condition of the American auto industry and its need for significant financial support from Congress to remain solvent. Following their unsatisfactory testimony, these executives were directed by Congressional leaders to return to Washington in December with precise plans on how they will use federal loans to restructure their companies in a manner that ensures long-term viability.
“After reviewing the proposals presented to Congress, I believe the Big Three’s restructuring proposals lack accountability. A responsible plan must accomplish two goals: protect taxpayers and help auto workers by making their employers more competitive. For Congress to consider providing $14 billion in taxpayer funded loans, it is imperative automakers assure the American people they can repay any loans they receive. Unfortunately, the plans submitted to Congress earlier this month are long on generalities and short on specifics, and failed to convince me the Big Three will be able to properly adjust their management, labor and legacy costs.
“In addition to the proposals offered by the automakers, the legislation considered in the House lacked any provisions to compel critically important restructuring in Detroit. I agreed with President-elect Barack Obama’s assertion that Congress must create ‘a bridge loan to somewhere as opposed to a bridge loan to nowhere.’ However, this legislation failed to implement the reforms that domestic automakers must embrace to ensure their long-term sustainability. Though the bill included appropriate limits on executive compensation, it lacked any substantial concessions from other affected parties – concessions that are absolutely necessary for the revitalization of the industry.
“In passing this legislation, Congress has established a process for reinvigorating Detroit that begins at the finish line rather than the starting gate. Prior to issuing any federal loans, firm benchmarks and a concise timeline for restructuring and repayment must be in place – agreed upon by the automakers and the auto workers. Promises by the Big Three and the United Auto Workers (UAW) union have been made to achieve savings, but rather than immediate implementation, many of these agreements will take months and even years to come to fruition. This is unacceptable. In lacking true reform, this legislation is a bridge loan to an even larger request for financial assistance a few months down the road. Money alone will not solve this problem.”