Prospects for a bailout of US automakers continue to dim, as Republicans in Congress and President Bush continue to oppose a 25 billion dollar bailout package for the Big 3 auto companies.
Prospects for a bailout of US automakers continue to dim, as Republicans in Congress and President Bush continue to oppose a new bailout package for the Big 3 auto companies.
The Democratic-controlled Congress is trying to pass legislation to provide help for the automakers but Republicans are saying that only their proposal will get the approval of the White House and be signed by President Bush.
Senate Republicans propose that automakers can use portions of a previous loan guarantee, provided earlier this fall, of 25 billion dollars for urgently needed operating capital. That money was originally intended for plant re-tooling and investment in future products.
The automakers have asked that an additional 25 billion in aid be taken from the 700 billion dollar bailout fund that Congress passed and President Bush signed in October. The Detroit automakers say they need that cash to keep operating through 2009, slated to be a very tough year in the automotive business. The Democratic leadership favors providing that additional money.
The Big 3 have come under heavy criticism in recent days, even from Congressional Democrats sympathetic to their cause. Critics of the bailout say that the automakers should not be bailed out for making bad business decisions and making agreements with the UAW that were too generous in terms of pension and health-care benefits.
The incoming Obama administration is in favor of a bailout. GM and Chrysler, both running quickly out of money, may have to hold on until January 20th, 2009.