As a $15 billion auto industry rescue takes shape, the terms of the plan would give government a major stake in the Big Three and allow it to guide a bankruptcy-like restructuring process, the Wall Street Journal reports. Under the terms of draft legislation, the US could take shares worth at least 20% of loans made; the firms would also have to curb execs’ pay and dividend payments on the watch of a government “auto czar.”
The czar, who would be named by President Bush, could lead restructuring negotiations and oversee any transaction worth more than $25 million. But the administration isn’t satisfied with the terms of the current bill, instead aiming for tougher rules on the industry. Still, the bill, which would extend bridge loans to tide companies over through March, will mean a financial “haircut” for everyone from labor to dealerships to executives, said House Speaker Nancy Pelosi.