Washington Maps Pact for Bailout of Big Three Automakers

Well, it looks as though we have an agreement in principle on an automaker bailout. The plan would initially include $15 billion in funds. After that, lawmakers would need to hammer out a long-term plan that includes taxpayer financing. Shocker. Assuming the plan passes muster with Congress, the automakers would be on a strict timetable to come up with a viable restructuring plan. Should be interesting.From the Wall Street Journal: If passed, the program would be overseen by an official whom congressional aides and lawmakers describe as an auto czar. He or she would bring together labor, management, creditors and parts suppliers to negotiate a long-term restructuring plan. The czar could pull back the loans if the companies don’t negotiate in good faith. And if a company and its stakeholders can’t agree on a plan, the czar would be required to recommend one, including the possibility of a Chapter 11 bankruptcy reorganization.The plans would have to be in place by March 31. The companies could qualify for a 30-day extension. But after that, the legislation would require the president to call the loans if no plan is produced.”Bottom line, that’s a big hammer,” the official said. “If they’re not viable, the money comes back to the government.”Unlike the banks, the automakers are being kept on a tight leash. Looks like lawmakers are trying to avoid a repeat of the $700 billion bailout, which didn’t provide for a lot of oversight in how the banks spent the money they grabbed from taxpayers.