The entire Michigan Congressional delegation today wrote Treasury Secretary Paulson urging the Administration to take steps to bring liquidity to auto financing, making it easier for consumers to buy U.S.-made vehicles. The just-passed Emergency Economic Stabilization Act adds to Paulson’s authority to do so, they contend. From the letter:
Historically, more than 94 percent of new vehicles sold to consumers in the U.S. have been purchased with financing. With the seizing up of credit markets, financing is not available for consumers seeking to buy or lease cars, nor is it available for dealers to purchase inventory. These circumstances have dramatically depressed vehicle sales, and declining sales put at risk not only auto manufacturers, but the widespread network of suppliers, vendors, and other peripheral businesses that provide goods and services to them. New vehicle sales in the United States fell 26.6 percent in September, and are expected to fall by 30 percent in October, bringing the industry to an annualized rate of 11 million vehicles, the lowest since 1983.
In this current economic environment it is imperative that the government ensures that liquidity is restored so that the U.S. auto industry is able to function until normalcy is restored to credit markets. We urge you to use your broad regulatory authority including the powers granted to you by EESA to take the necessary steps to promote liquidity in the U.S. auto industry in order to protect this critical sector of the economy.
At a news conference, House Energy and Commerce Chairman John Dingell said: “We need to do something to help unfreeze the credit markets for that industry, as well as all others. The Michigan Delegation is pursuing all options and asking that the Bush Administration – Treasury, Fed, FDIC – also consider all available options.”
Dingell told the AP that automakers were considering asking the Federal Reserve for access to its discount window to provide low-cost credit. (News story.)
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