US car industry bill facing Senate opposition
A £9bn (€6.74bn) bailout of the US car industry looked set to encounter problems passing the Senate despite urgent appeals by both President-elect Barack Obama and President George Bush today.
Two of Detroit’s so-called Big Three car manufacturers, General Motors (GM) and Chrysler, have said they need the $14bn (€10.48bn) of federal loans if they are to survive beyond the end of the month.
Ford also asked the US Congress for money, but its financial future is more certain than the other two.
As the legislation – agreed by the White House and the House of Representatives - headed towards a Senate vote, Senate Republican leader Mitch McConnell said the measure “isn’t nearly tough enough”.
He called for a different bill – one that would force US carmakers to cut wages and benefits to bring them in line with Japanese carmakers Nissan, Toyota and Honda – in return for any federal aid.
That approach was virtually certain to be a non-starter among Democrats who count labour unions among their strongest supporters.
The stalemate highlighted the difficulty of pushing another rescue package through a bailout-fatigued Congress, particularly one designed to span the administrations of a lame-duck president and his successor.
But both Mr Bush and Mr Obama were united in campaigning for its swift approval.
White House press secretary Dana Perino said the country could not afford a car industry meltdown and added: “We don’t think the economy can sustain it.”
Speaking in Chicago, Mr Obama, who takes over from Mr Bush on January 20, said the car firms had “failed to move quickly enough” but added: “At this moment of great challenge for our economy, we cannot simply stand by and watch this industry collapse.
“Doing so would lead to a devastating ripple effect throughout our economy.”
He went on: “I believe our government should provide short-term assistance to the auto industry to avoid a collapse, while holding the companies accountable and protecting taxpayers’ interests.
“The legislation in Congress right now is an important step in that direction, and I am hopeful that a final agreement can be reached this week.”
In Congress, patience was wearing thin as the clock ticked down on the current Congress and Democratic leaders were short of the votes they would need to pass the measure.
Senator Harry Reid, the Democratic majority leader, called for swift separate votes on compromise legislation backed by Democrats and the White House as well as the Republican proposal.
If not, he promised a test-vote Friday morning to force a final vote within days.
“We have danced this tune long enough,” he said.
But many Republicans remained staunchly opposed to it, and some Democrats were ill or absent from the emergency, post-election congressional session.
Supporters of the bailout acknowledged that in this scenario, getting the requisite 60 votes to pass it in the Senate would be very difficult.
