Dear Mr. Reinke:
Thank you for contacting me to express your views on the auto industry rescue plan. Your opinion is very important to me, and I appreciate the opportunity to respond to you on this vital issue.
Without a doubt, the American automotive industry has been a major pillar of our nation’s manufacturing success. Unfortunately, decades of poor business practices have been exacerbated by the recent credit market freeze pushing our nation’s auto industry to the brink of collapse. Such a massive failure would have dire consequences for a struggling economy that saw more than half a million jobs disappear in November alone. With one in ten American workers relying on the automobile industry, failure of this industry could result in the loss of more than 3 million jobs as the ripple effects reverberate throughout the entire economy. New Jersey alone would lose over 65,000 jobs.
There can be no denying that short-sighted management decisions have played a major role in the decline of the Big Three. However, simply letting these companies go bankrupt would cost millions of American workers their jobs – workers who were not part of that decision-making process. As a member of the Senate Banking Committee, I have paid close attention to the proposals of the automotive industry. Initially, the heads of the Big Three testified before Congress and essentially asked for a blank check. Their plan included little transparency or oversight and provided few details on restructuring or financial solvency. This was simply unacceptable, so Congress demanded that they return with a comprehensive plan.
The plan they later presented on their second visit was much improved and contained a number of important concessions and safeguards. My primary concern with any taxpayer assistance for the Big Three is that there is proper oversight, and that we include safeguards to make sure these taxpayer loans are repaid. This is why we included provisions clamping down on executive compensation, requiring the automakers to issue stock warrants to the government, and prohibiting the companies from issuing dividends until they repaid their taxpayer loans. This legislation also included efforts to address the long-term competiveness of the auto industry. The Big Three have spent the last 20 years fighting fuel economy standards for their products, much to their own detriment. In the long-term, we will require automakers to adhere to strict standards in building cleaner, more energy efficient vehicles, which will benefit America’s national interest as well as the Big Three’s bottom line.
As you may know, the Senate failed, by a vote of 52 to 35, to even bring this issue to the floor for consideration. I voted in support of cloture because I believe this is a vitally important economic issue that, at the very least, warrants debate and consideration in the Senate.
Regardless of your views on this particular piece of legislation, I believe we can all agree that our economy is in a serious recession and more must be done to assist American families. Please rest assured that as your United States Senator, I will do everything in my power to protect jobs and restore our economy so the American Dream is attainable once again.
Thank you again for contacting me with your concerns. For additional information on this issue and my other legislative priorities, please visit my website: . It is an honor to represent you in the United States Senate.