Rep. Miller wants immediate action on auto loans in wake of Chrysler job cuts

David Shepardson / Detroit News Washington Bureau

WASHINGTON — Rep. Candice Miller urged the Energy Department Friday to immediately make available $25 billion in low-cost direct government loans to automakers in the wake of news that Chrysler LLC will cut 5,000 salaried and contract workers.

"The federal government must immediately make available the $25 billion in loans for the auto industry that the Michigan Congressional Delegation worked in a bi-partisan fashion to pass. The Department of Energy’s bureaucratic delays in implementing this program have been incredibly frustrating and stand in stark contrast to the immediate action taken by the administration in their efforts to bail out Wall Street," Miller, R-Harrison Township, said in a statement. "Goldman Sachs did nothing to create the American middle class, but got immediate help when they got into trouble. Chrysler, Ford and General Motors not only built the American middle class, but also helped to defend our nation in times of national crisis. Further bureaucratic delays are unacceptable and will be met with fierce Congressional opposition."

The Energy Department recently named a director of the loan program and is working to meet a congressional deadline of Nov. 30 to finalize the rules governing the retooling program. But Energy Secretary Samuel Bodman warned in a Sept. 22 leter to Congress that it could take "six to 12 to 18 months or more" to process and send out the loans, citing a number of legal hurdles.

Automakers and suppliers have poor credit ratings and could save more than $100 million per $1 billion borrowed in intrest under the program. They could also seek up to five years deferrment of repayment.

The Michigan congressional delegation sent a letter Thursday to Treasury Secretary Paulson and Federal Reserve Chairman Bernanke urging them to use the authority granted by Congress in the $700 billion Wall Street rescues package to provide additional liquidity that would allow the auto market to continue functioning until normalcy is restored in the economy.

Rep. John Dingell, D-Dearborn, chairman of the House Energy and Commerce Committee, said "all available options" should be considered, incuding allowing the automakers direct access to the Fed’s Discount Window, where they would have access to extremely low-interest government loans.