House OKs $14B Auto Bill _ but It's Still in Peril

Obama defended the auto bailout as necessary given the threat a potential Big Three collapse could pose to an already battered economy.

In this Dec. 4, 2008 file photo, auto executives, from left, General Motors Chief Executive Officer...

In this Dec. 4, 2008 file photo, auto executives, from left, General Motors Chief Executive Officer Richard Wagoner, UAW President Ron Gettelfinger, Ford Chief Executive Officer Alan Mulally, and Chrysler Chief Executive Officer Robert Nardelli testify on Capitol Hill in Washington, before a Senate Banking Committee hearing on the auto industry bailout. House Speaker Nancy Pelosi touted the notion of a "car czar" Tuesday, Dec. 9, 2008, to supervise an auto industry bailout, saying Big Three executives haven't adapted well to changing conditions. (AP Photo/Gerald Herbert, File)

(AP)

"As messy as it may be, I think there's a sense of, 'Let's stabilize the patient,'" he said in an interview published in Wednesday's Chicago Tribune and Los Angeles Times.

The car czar would have say-so over any major business decisions by the automakers while they were taking advantage of federal aid, with veto power over any transaction of $100 million or more. The companies — including the private equity firm Cerberus, which owns a majority stake in Chrysler — would have to open their books to the government overseer.

And if Chrysler defaulted on its loan, Cerberus would be responsible for reimbursing the government.

The measure also would attach an array of conditions to the bailout money, including some of the same restrictions imposed on banks as part of the $700 billion Wall Street rescue. Among them are limits on executive compensation, a prohibition on paying dividends and requirements that the government share in future profits and taxpayers be repaid before any other shareholders.

Also included in the bill is an unrelated pay raise for federal judges.

———

Associated Press writers Ben Feller, Andrew Taylor and Jim Abrams contributed to this report.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.