Detroit Automakers, UAW to Seek Cash and Loans for Benefits
First, the industry executives will ask lawmakers to use their influence—and perhaps a legislative directive—to get the Treasury Department or Federal Reserve to provide a cash infusion to the companies.
Second, the officials will ask Pelosi to help provide $25 billion in low-interest government loans to help General Motors, Ford and Chrysler meet their obligations to newly created retiree health benefit funds, the source said.
Those funds, called voluntary employee beneficiary associations, were created under last year’s collective bargaining agreement with the UAW.
The new loans would be in addition to $25 billion in low-interest loans approved in September for automakers and suppliers to improve the fuel economy of vehicles.
The new $25 billion would be part of an economic stimulus bill that Pelosi, D-California, wants to consider during a lame-duck session of Congress scheduled to begin November 17.
Earlier this week, Pelosi hedged on whether there will be such a bill if Republican lawmakers and the Bush administration do not express support.
The source said the huge looming obligations posed by the beneficiary funds are among the reasons the Detroit Three automakers can’t get credit from private lenders. UAW president Ron Gettelfinger and Detroit automaker CEOs were expected to attend the meeting.
The source said the industry executives “will be making the case that there is a need for immediate government assistance to the industry because of what’s happened with the economic and credit crunch and the resulting huge drop in auto sales.”
Filed by Harry Stoffer of Automotive News, a sister publication of Workforce Management. To comment, e-mail firstname.lastname@example.org.