Michigan Delegation Urges Immediate Action on Auto Industry

Press Release

Michigan Delegation Urges Immediate Action on Auto Industry

Letter Asks Secretary Paulson to Provide Loan Support to Address ‘Significant and Systemic Threat'

The Michigan Congressional Delegation sent a letter to Treasury Secretary Henry Paulson urging that he use authority granted under the Emergency Economic Stabilization Act (EESA) or other statutes to provide emergency assistance to the domestic automobile industry. Members of the Michigan delegation released the following statements regarding the letter:

"The struggles currently facing the auto industry threaten the economic well being of our entire nation, and they require immediate government support," said Senator Levin. "I am hopeful that the Bush administration understands the urgency and gravity of providing fast, effective support to the auto companies. Providing this assistance through the Emergency Economic Stabilization Act is the best way to achieve that goal."

"The domestic auto industry built the middle-class of our country and without a thriving manufacturing sector, our economy simply cannot grow," said Senator Stabenow. "Our automakers are racing to produce the next generation of vehicles here at home, but in order to reach those goals, and protect jobs here at home, they need our support. Providing capital in the domestic auto industry is a crucial step in supporting the industry and supporting the middle-class."

"Americans made it clear at the voting booth last week that they believe it is time for government to be part of the solution, not part of the problem," said Rep. Dingell. "U.S. automakers are on the verge of producing new high-quality, energy-efficient vehicles that consumers want and will transform the marketplace. This is the time to invest in companies wanting to create new green jobs here in the U.S., but we must protect the millions of jobs at risk right now. We cannot simply let these jobs and these companies disappear because we will never be able to replace them."

"Our nation's leaders must not turn a deaf ear toward helping the nation's automakers, especially as at least one out of every 10 jobs across America is auto-related," said Rep. Fred Upton, co-chair of the Congressional Auto Caucus. "The health of our nation's economy hangs in the balance - we can either stand by and do nothing, watching tens of thousands of jobs in Michigan and Middle America evaporate, or we can meet our challenges head on, proudly protecting America's middle class workers and putting us back on the road to economic recovery."

"The time for action is now," said Rep. Levin. "The auto companies need a bridge loan to weather the current financial storm and to continue down the path of building the cars of the future."

"The jobs of millions of middle class Americans depend on a vibrant domestic auto industry," said Rep. Stupak. "As we hear today of plans for a $150 billion bailout of AIG, it is unconscionable to deny the domestic auto makers loan assistance as they struggle to weather the current credit crisis. In the final days of this administration, Secretary Paulson and President Bush have an opportunity to prevent a devastating blow to our economy and the loss of millions of jobs by making a critical investment in an industry that has helped define our nation."

"When Wall Street was in trouble the administration acted with lightning speed to provide relief," said Rep. Miller. "Now our industry needs help and the administration has been slow to act. It is long past time that the administration recognizes the threat to our economic security and national security posed by the precarious financial situation of our domestic automakers and take appropriate action authorized by law. I am proud to continue this bi-partisan effort with my Michigan colleagues which is guided by our common goal of protecting jobs and helping our automakers to reach a brighter future."

The text of the letter as well as a list of signers is below.

November 10, 2008

The Honorable Henry Paulson
U.S. Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220

Dear Secretary Paulson:

We are writing to urge you in the strongest possible terms to use your authority under the Emergency Economic Stabilization Act (EESA) or other statutes to immediately address a significant and systemic threat to the U.S. economy and provide emergency assistance to the domestic automobile industry.

The U.S. auto industry represents almost four percent of U.S. gross domestic product and represents ten percent of U.S. industrial production by value. One out of every 10 U.S. jobs is auto-related. General Motors, Ford and Chrysler account for roughly 70 percent of U.S. auto production and are estimated to support around five million jobs across all 50 states. According to a report released last week by the Center for Automotive Research, the failure of even one US automaker would mean the loss of millions of jobs and cost our economy hundreds of billions of dollars. Inaction is not an option

These last years have seen the domestic automakers pursue an unprecedented restructuring that has put them in a very competitive position with respect to product quality (Ford has tied Toyota and Honda in quality according to Consumer Reports), fuel efficiency (GM offers 17 models achieving 30 MPG or better - twice the nearest competitor), and advanced technology vehicles (Chrysler has announced the launch of electric vehicles beginning in 2010 and all three companies have extensive hybrid offerings).

In addition, the three domestic automakers spend a combined $12 billion annually on research and development. This R&D capacity is a national asset that would be put at risk if we do not restore the health of our auto industry.

This vital role that the domestic auto industry plays in our economy is broadly recognized. Congressional Leaders in both the House and Senate have met with representatives of the industry and its workers at the most senior level and have expressed to you that "A healthy automobile manufacturing sector is essential to the restoration of financial market stability, the overall health of our economy, and the livelihood of the automobile sector's workforce."
On Friday, President-elect Obama said, "The auto industry is the backbone of American manufacturing and a critical part of our attempt to reduce our dependence on foreign oil… I have made it a high priority for my transition team to work on additional policy options to help the auto industry adjust, weather the financial crisis, and succeed in producing fuel-efficient cars
here in the United States of America… I've asked my team to explore what we can do under current law and whether additional legislation will be needed for this purpose."

As you know, both General Motors and Ford released 3rd Quarter earnings last week that make clear the severity of the strain the auto industry is experiencing. It is our view that providing emergency assistance to this uniquely important industry, which is struggling to meet the challenge of a severe financial crisis that has spread far beyond Wall Street, is consistent with the authority granted to you by EESA, and indeed well within the broad mandate of the Treasury Department to promote stable economic growth.

Given the urgency of the situation, we ask that you work with us in the coming days to provide immediate loan support to the domestic auto industry, including, if necessary, amending EESA.

Sincerely,

Senator Carl Levin
Senator Debbie Stabenow
Rep. John Dingell
Rep. Fred Upton
Rep. Sander Levin
Rep. Dave Camp
Rep. John Conyers
Rep. Dale Kildee
Rep. Vern Ehlers
Rep. Peter Hoekstra
Rep. Joe Knollenberg
Rep. Bart Stupak
Rep. Carolyn C. Kilpatrick
Rep. Mike Rogers
Rep. Thaddeus McCotter
Rep. Candice Miller
Rep. Tim Walberg

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