Washington, D.C. - Speaker Nancy Pelosi spoke on the House floor tonight in support of the Auto Industry Financing and Restructuring Act, which passed by a vote of 237 to 170. Below are her remarks:
“Mr. Speaker, I rise in support of this important legislation. I commend Chairman Frank for his persistence in bringing a very focused and disciplined bill to the floor. I thank Mr. Bachus for his leadership as well.
“As Speaker of the House I am pleased to rise to quote another Speaker of the House, Sam Rayburn - a legend in our country, certainly in this Congress. He served here with great distinction.
“And he said the following: ‘When I was a child, I lived way out in the country. I'd sit on the fence on Sundays and wish to God that somebody would ride by on a horse, or drive by on a buggy. Just anything to relieve my loneliness. Loneliness,' he said, ‘consumes people. That's why I'm so glad to see that today farmers have cars.' And he goes on to say what that progress meant in the life of developing a sense of community.
“Since the days when Model Ts first rolled off Henry Ford's assembly line, owning a car has been a part of the American Dream. I know when I was young, when the new models would come out, it was a very festive occasion. But today, the American automotive industry is imperiled due not only to recession and a credit freeze, but because it has been on the wrong track for long-term competiveness and job creation.
“Today, we are considering legislation not as life-support to sustain a dying industry, but a jump start for an industry that is essential to our country's economic health. One in 10 American jobs is linked to the domestic auto industry, and it is a key pillar in an American manufacturing sector critical to our national security and economic competitiveness for decades to come.
“This legislation is about offering Detroit--and America--a chance to get back on track. This legislation is built on four principles and actually comes down to a question of tough love. Tough love for an industry whose success is essential to our economic success, whose jobs are important to our workforce, whose innovation is essential to our progress, and whose manufacturing, technological, and industrial base is also essential to our national security.
“There are four principles in the bill:
“First, when we ask taxpayers to put up money to fund this restructuring, we must have accountability to the American people. The President will designate a ‘car czar' to oversee the industry's restructuring. The taxpayers get a return on their investment or are first in line to be repaid. Thank you, Mr. Frank, for insisting on that provision.
“No golden parachutes, bonuses, or corporate jets for executives. And the Government Accountability Office and the TARP--that's the Troubled Asset Recovery Program--Inspector General will provide independent oversight to protect our investment. Accountability for the taxpayer.
“Second, there must be shared sacrifice. Every party to the auto sector must be present at the table.
“Mr. McCotter rightly referenced the United Auto Workers making concessions. But they shouldn't be the only ones making concessions. I've called it a barber shop. When one person gets a haircut, everyone must get a haircut. That means those who are shareholders, those who are bondholders, must have a cramdown on what return they get on the dollar. Suppliers have to understand the realities of what the market is for these cars. Dealers have to be treated with the respect that all of these elements deserve, but with the reality of what the real marketplace is and what the markets for the cars are. The auto workers have made concessions already, perhaps they must be expedited; perhaps they must do more. But everything must be a shared sacrifice. The executive suite, the management of the companies, they must be part of that sacrifice as well.
“Third, the auto companies must restructure or repay. The companies must restructure to achieve viability, international competitiveness, and they must do this with fuel efficiency, and reduced emissions. And if they do not -- and this is important for our colleagues who do not support this bill because we share many views -- this has to be a tough standard, because otherwise we're just putting up money for more of the same. That is not what this legislation is about, nor should it be.
“The car czar can require immediate repayment of the loan if the company has not made adequate progress by February 15th to develop a long-term restructuring plan. The company will get no more federal assistance if it fails to submit an acceptable final restructuring plan by March 31st.
“Fourth, and finally, there must be a commitment to innovation and efficiency. Green is gold. Making a commitment to innovation, fuel economy, and better emission standards makes the automotive industry and our country more competitive. People will want to buy their cars. The legislation calls for maintaining $500 million of the innovation funding set aside to help the industry retool to build advanced technology vehicles that greatly improve efficiency and reduce carbon emissions - and replenishing the remainder of the innovation funds within weeks.
“Now let me just say this: I have objected strenuously to using the green finds, the so-called Section 136 funds, because their purpose in our energy bill last year was very specific -- advanced manufacturing technology. It was for the retooling, making sure manufacturers had funds to research and develop. The Administration insisted that money be used instead for this restructuring period of time. I reluctantly agreed only with the idea that the money would be replenished.
“Without that advanced manufacturing technology, we are not going to have the progress necessary to compete internationally and domestically. Most of this is about the environment and the greening of the automotive industry. I know the auto industry can do it.
“Do you know that in Europe this year, the car that took first place in the ratings there was a GM Opal? A General Motors Opal. Second place went to a Ford Fiesta. Over 100 points behind them was Volkswagen. These are American-made cars in Europe that they have not chosen to sell in America. Something is wrong with this picture.
“We know that in Latin America, the fuel-flex cars have sold for years. They are American-made cars -- millions of them. But the industry chose not to advance them here because they made more money off of SUVs and the executive compensation and bonuses were tied to SUVs. Something is very wrong with this picture.
“So what we're saying here is: ‘Everybody come to the table; everybody get a haircut.' Only then can we restructure this so that we have a competitive industry looking to the future, as Sam Rayburn looked to the future when he was so excited about seeing cars for the first time bringing the American people together. American cars have always been a part of the American dream.
“I'm optimistic because I see us with two choices: one is the automotive industries on the brink, and some are advocating bankruptcy because they will make money. But that takes us down into a deep pit for a long period of time that is detrimental to our economy, harmful to our workers, and certainly does not make us more competitive internationally.
“Instead, we have listened to what the companies have had to say. We said: ‘You're not going to get any money until we've seen the plan.' We've seen the plan, and it was better than we saw before. Much more needs to be done. This affords a period of time with half of what they asked for. We want to see performance and milestones by certain dates that they are making this progress. And we want to see a change in mentality of the executive suite in Detroit.
“What a great community, Detroit; what a great state, Michigan. We want to throw a lifeline for success. If you're upset with how the Big Three executives have operated, if you're upset about the fact that we're not competitive internationally, if you're upset that the taxpayer dollars have to be committed to this, you should be very pleased with what this legislation does because it captures your frustration with it all. It sets us on a new path to viability. And it is a test.
“I salute the United Auto Workers for being the model, and leading the way to say ‘We respect this industry, we want to advance it, and we are willing to take the lead in making those concessions.' So this is an important day in the life of America when the Congress is speaking for the people, who are rightfully unhappy about all of this money going to companies that are supposed to be in the free market and competitive. But nonetheless, they understand what is at risk for all of us. If bankruptcy were to occur, it would exact much more of a toll than the amount of money we would be putting forth here.
“The legislation that we have before us is the legislation that we conceded on several points to agree to the White House language. This is bipartisan in its nature and it is the legislation that we said we would go forward with in a bipartisan way and that the President would sign. We hope that the White House keeps it word that it gave us last night about this legislation, and we encourage the Senate to follow suit so the message will be clear to the markets, all concerned with the automotive industry, and the American people.
“We stand willing to share in this sacrifice and we stand willing to do this by voting yes on this important legislation.”