Obama says he would act fast on $25 billion auto loans
OREGON, Ohio/WASHINGTON (Reuters) - Democrat Barack Obama said on Tuesday that as president he would demand that up to $25 billion in government loans targeted for distressed U.S. automakers be distributed quickly.
Obama told reporters that General Motors Corp, Ford Motor Co and Chrysler LLC find themselves in a unique financial situation, having been hard hit by rising gasoline prices this year and the global credit crunch.
"If I were president right now, I would call in the secretary of energy and say 'get this thing moving' because these companies need help now," Obama said.
Obama's comments were likely to resonate in the presidential battleground of Ohio, which has almost 100,000 auto jobs and, like neighboring Michigan, has been squeezed in other significant ways by the car industry downturn.
Obama's Republican rival, John McCain, also supports helping Detroit.
Automakers and their allies in Congress from Michigan and Ohio have been pressing the Energy Department to accelerate the loan program, which was approved by lawmakers last month. Car companies are eligible to use the money to retool plants and take other steps to make more fuel efficient cars.
Struggling Detroit manufacturers have always viewed reasonably quick access to the money as crucial to their financial turnaround plans, but worsening cash flow and mounting credit problems in recent weeks have added new urgency to obtaining the financing.
The Energy Department has said it would complete the regulatory framework for issuing the loans by December, as required by Congress. However, the agency has said additional environmental and other administrative hurdles will likely push the timeline further out for approving financing for qualified projects.
Similar regulatory efforts can take up to 18 months.
The White House expressed no intent, publicly at least, to intervene.
"I know people are working as quickly as possible, and they're working with the manufacturing industry and the auto industry to provide the support they needed to get the regulations in place," White House spokeswoman Dana Perino said.
Labor and industry lobbyists have called on the White House to act. Failing that, they say a return to Congress next month or in January may be necessary to insert language in loan authority legislation to force the executive branch to move faster.
The No. 2 Republican in the House of Representatives, Roy Blunt of Missouri, said he would encourage the Energy Department to "get those rules out there as quickly as possible."
As for additional congressional involvement this year: "We've done what we need to do," Blunt said.
Auto companies and their financing affiliates also hope for substantial assistance under the financial rescue package being carried out by the government to buy up bad mortgage and other debt on corporate books and stimulate stalled credit markets.
(Additional reporting by Kevin Krolicki, Jeremy Pelofsky and Richard Cowan; Editing by Tim Dobbyn; editing by Carol Bishopric and Bernard Orr)
