Up to $25 billion will come from the short-termsection 136 money of the Energy Act, designated for fuel-efficient technology.
The loans are due in seven years.
Interest rate is 5 percent for the first five years; 9 percent for the remaining two years. No prepayment penalty.
The president will designate one or more Executive Branch officers to carry out the purposes of the bill (the so-called "car czar" or board). He/she will authorize and direct the disbursement of bridge loans, or loan guarantees, to General Motors, Chrysler LLC and Ford Motor Company.
The car czar can look over the books of any automaker receiving the funds, or of any ownership interest holding at least 50 percent of the automaker. We're looking at you, Cerberus.
The car czar may prohibit an automaker from consummating a proposed sale, investment, contract, commitment or other transaction. We're looking at you, Chrysler. And no fair buying exotic sports carmakers, GM or Ford.
They're prohibited from suing any state over laws concerning greenhouse gas emissions standards. See California and 16 states.
The federal government will hold warrants, which assures we get paid back before shareholders receive dividends. That's GM and Ford.
Chrysler gives "a warrant for common or preferred stock, or an instrument that is the economic equivalent" of Chrysler or Cerberus.
Executive compensation: No dollar amounts. Executives cannot take "unnecessary and excessive risks that threaten the value of" manufacturing, bonuses or compensation based on performance later found to be inaccurate, and no golden parachutes.
No ownership or lease of private aircraft for the duration of the loan.
By January 1, 2009, the car czar/car board will determine how to measure progress based on the plans they submitted to Congress on December 2 in order to "transform" assistance into long-term assistance.
The car czar must evaluate the automakers' development toward restructuring every 45 days.
The car czar must report to Congress every 15 days on progress to negotiate restructuring plans for each automaker receiving money.
By March 31, each eligible automaker must submit to the car czar a long-term restructuring plan for the long-term viability and international competitiveness, resulting in repayment of the financing and ability to comply with all federal and state fuel efficiency requirements, and commencement of advanced technology vehicle manufacturing, as required in the 2007 Energy Bill.
Also due by March 31; plans for new and existing products and capacity.
They must submit plans to make profits.
They must submit plans to rationalize costs, capitalization and capacity with respect to manufacturing workforce, suppliers and dealerships.
They must submit plans to restructure existing debt.
They must show a product mix and cost structure that is competitive in the U.S. marketplace.
Once their long-term restructuring plans have been approved, the car czar may provide long-term financial assistance.
The car czar can determine which automaker gets money first, based on need and the effect of each automaker's failure.

General Motors Corp. Chief Executive Officer Rick Wagoner’s options for the biggest U.S. automaker have dwindled to two, neither imaginable when he took the top job in 2000: Nationalization or bankruptcy.

Either way, the company is slipping away from him.

Congress holds GM’s fate as leaders rush to vote on a rescue plan. After saying bankruptcy would be a prelude to shutting the doors, Wagoner is ready to accept a so-called car czar who will dictate how GM is managed.

“They either have to liquidate, or roll the dice and swallow whatever a government-run car company is going to look like,” said Clint Currie, a transportation analyst for Stanford Group Co. in Washington. “The only thing we can know for certain is they probably won’t like a lot of the decisions. They are going to lose control of their company.”

Approval of a bailout for GM and Chrysler LLC would put automakers under U.S. direction for the first time since 1980, when the former Chrysler Corp. agreed to federal oversight in exchange for $1.8 billion in loan guarantees.

GM, reeling from almost $73 billion in losses since 2004 and a 22 percent plunge in U.S. sales this year, says it will run out of money this month without a cash infusion. In return, the Detroit-based automaker says it will accept giving warrants worth 20 percent of the $10 billion being sought in loans and appointment of a czar who would have to review and approve expenditures larger than $100 million.....

Bayerische Motoren Werke AG and Daimler AG, the largest luxury-car makers, stand to benefit more from a government rescue of the U.S. automobile industry than if their competitors go bankrupt.

A proposal to grant General Motors Corp. and Chrysler LLC $15 billion in emergency funding should avert a meltdown that would depress sales and drag down the financially strapped parts makers that supply the European companies’ plants both in North America and elsewhere.

“You can’t underestimate what would happen when a large player collapses,” BMW Chief Executive Officer Norbert Reithofer said yesterday in an e-mailed response to questions. “That would impact the supplier structure and therefore the entire industry.”

The U.S. is the No. 1 market for the Munich-based company and the second-biggest for Daimler’s Mercedes-Benz. Both carmakers have factories there, and while they and other German brands control about 7 percent of the American market, they compete more with each other than with GM and Ford Motor Co.....

More than a year into the credit crisis, Federal Reserve Chairman Ben S. Bernanke is still trying to establish how far he’s willing to go to aid troubled companies.

Bernanke, in a letter released yesterday, rejected the idea that the central bank should provide assistance to automakers, saying that such aid would involve the Fed in “industrial policy,” an area best left to Congress. The letter came in response to a Dec. 3 inquiry from Senate Banking Chairman Christopher Dodd.

The exchange reflects uncertainty over the limits of the Fed’s willingness to act following conflicting signals Bernanke has sent this year. While the Fed rescued Bear Stearns Cos. and American International Group Inc., it refused to intervene on behalf of Lehman Brothers Holdings Inc. -- only to see Lehman’s failure trigger widespread losses and worsen the credit crisis.

Bernanke is attempting to re-establish a clear line: that the central bank will only assist firms vital to the financial system, a definition that would exclude companies such as General Motors Corp.....

As if Ford didn't have enough bad PR today after a South Carolinian dealer shout his mouth off on the radio. Now comes word that fan site TheRangerStation.com (TRS) has been contacted by the automaker's lawyers and told to cough up $5,000 and the rights to the website's domain name as a result of copyright infringement. First of all, we're just as surprised as you that there's a fan site devoted to the Ford Ranger and that the Blue Oval even remembered it still sold the Ranger.

This isn't the first time that Ford has sought to protect its trademarked names. Earlier this year it sent out lawyers to confront enthusiast magazines, websites and even parts suppliers using the Mustang name. We're not sure how those cases ended, but we can understand the Blue Oval getting antsy over unapproved use of its most famous brand. But the Ranger? We suspect that TRS ran afoul when Ford's lawyers noticed the online store at which people can buy decals and apparels bearing the website's name.

Despite what you may think of Ford's actions here, TheRangerStation.com has little wiggle room. The 10-year-old website can either pay Ford the licensing fee and seek approval for all material on its website bearing the Ranger name, or it can erase all mention of the truck's moniker from the website, including the URL. Members are currently emailing Ford to petition against these two options, so we'll see what happens.

Ford USA: