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Congress' Big Auto Bailout Mired in Red Tape

Money coming later rather than sooner

By Kevin Spak,  Newser Staff

Posted Oct 22, 2008 9:59 AM CDT

(Newser) – Detroit's $25 billion loan is sitting in Washington, the Washington Post reports, and may take more than a year to distribute, despite the auto industry's increasing desperation for the cash. The Energy Department, which was tasked with doling out the money, says various legal and administrative requirements will drag the process out 6-18 months. “Congress had the opportunity to waive these requirements,” said a department spokeswoman, but “has chosen not to.”

Auto-state lawmakers are outraged. “It's inexcusable and inexplicable that they cannot get these loan guarantees out there faster,” says a spokesman for one. Michigan Sen. Carl Levin, meanwhile, wants to put more money for automakers in the upcoming stimulus package. But that money wouldn’t come any faster, and the auto industry needs the money now—GM lost $15.5 billion last quarter, and JD Power thinks 2009 may see an “outright collapse” in the global auto market.

Workers place an engine assembly in a 2009 F150 pickup at the Kansas City Ford Assembly Plant in Claycomo, Mo., Thursday, Oct. 2, 2008.
Workers place an engine assembly in a 2009 F150 pickup at the Kansas City Ford Assembly Plant in Claycomo, Mo., Thursday, Oct. 2, 2008.   (AP Photo/Charlie Riedel)
Carl Levin, D-Mich., wants to tack more money for the industry onto the upcoming stimulus bill.
Carl Levin, D-Mich., wants to tack more money for the industry onto the upcoming stimulus bill.   (AP Photo/Lawrence Jackson)
A long line of unsold 2007 pickup trucks sits outside a Chevrolet dealership in the northwest Denver suburb of Wheat Ridge, Colo., on Sunday, May 6, 2007.
A long line of unsold 2007 pickup trucks sits outside a Chevrolet dealership in the northwest Denver suburb of Wheat Ridge, Colo., on Sunday, May 6, 2007.   (AP Photo/David Zalubowski)
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