Voinovich: auto loans must be repaid, companies need viability plan

U.S. Sen. George Voinovich stepped into the national spotlight that’s shining on the teetering automotive industry during a press conference in Washington on Thursday.

Voinovich (R-Cleveland) helped draft a plan to make auto companies eligible for $25 billion in loans to support the operations of General Motors, Ford and Chrysler before they exhaust their cash reserves. The plan Voinovich worked on aims to free up $25 billion already approved by Congress to auto makers in pursuit of “green” car technology.

Voinovich called the plan a bipartisan compromise to protect a “cornerstone of the American economy.” The senator stressed that passing the bill would not automatically grant a loan to the Big Three, but only make them eligible.

“To put this into simplest form: there’s no guarantee that if this legislation passes that someone will get a loan. What it does do is it sets up a vehicle where the companies can come, submit a plan, discuss it and if they are found to be eligible they are going to get a loan,” he said.

In return for a loan, the proposal asks for detailed evidence from auto makers that will guarantee their financial viability and ensure the loans are repaid, Voinovich said.

Addressing critics who say bankruptcy for the Big Three is preferable to government loans, Voinovich said the economy is too frail to cope with widespread bankruptcies.

“If we don’t get this done and they do go under and I believe we will have a deep recession, and quite frankly from what I can pick up we may go over the cliff,” Voinovich said.

Senate Majority Leader Harry Reid (D-Nev.) said the bill will not be heard until December. Voinovich said he was disappointed by the scheduled delay.

Voinovich was joined by U.S. Sen. Sherrod Brown (D-Lorain).