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Their efforts in Congress squashed, U.S.
automakers are depending upon a reluctant White House to quickly
provide a multibillion lifeline to help them avoid imminent
collapse.
      

General Motors Corp. and Chrysler LLC, which have said they
could run out of cash within weeks, have few options left after the
dramatic defeat in the Senate of a $14 billion bailout for the
domestic auto industry.
      

Its demise late Thursday prompted immediate calls from lawmakers
in both parties for the Bush administration to tap into the $700
billion Wall Street bailout to rescue the beleaguered auto
industry. The bill failed after talks broke down over the refusal
of the United Auto Workers union to meet Republican demands for
aggressive wage reductions.
      

The Senate rejected the bailout 52-35 on a procedural vote -
well short of the 60 required - after the talks fell apart.
      

"I dread looking at Wall Street," said Senate Majority Leader
Harry Reid in anticipation of Friday's stock market reaction.
"It's not going to be a pleasant sight."
      

Stock markets in Asia and Europe dropped sharply on Friday after
getting word of the bailout's failure.
      

The Bush administration has repeatedly said the Wall Street
bailout fund should not be used for emergency aid to the automakers
because it was designed to restore stability to the financial
sector. Following the vote, the White House said it was studying
its options.
      

"Plan B is the president," said Sen. Carl Levin, D-Mich. House
Speaker Nancy Pelosi said action by President George W. Bush was
the "only viable option."
      

General Motors and Chrysler are in the most immediate danger
while Ford Motor Co. has said it does not need federal help now,
but could face collateral damage if one of its domestic rivals
fell. With the economy in recession, the auto industry has
struggled under the weight of lackluster sales and choked credit
markets.
      

Detroit's carmakers employ nearly a quarter-million workers, and
more than 730,000 others produce materials and parts for cars. If
one of the automakers declared bankruptcy, some estimate as many as
3 million U.S. jobs could be lost next year.
      

The White House said it was disappointed by the vote and the
legislation "presented the best chance to avoid a disorderly
bankruptcy while ensuring taxpayer funds only go to firms whose
stakeholders were prepared to make difficult decisions to become
viable."
      


Many congressional Republicans and some economists said the
companies would be best to pursue a prearranged bankruptcy that
would allow them to restructure quickly. But most Democrats and the
carmakers rejected that, arguing it would quickly lead to
liquidation because consumers would never buy cars from a bankrupt
auto company.
      

As it lobbied unsuccessfully on Thursday, White House officials
said the weak economy couldn't afford the collapse of the auto
industry. President-elect Barack Obama said an industry shutdown
would have a "devastating ripple effect" on the already battered
economy.
      


GM said in a statement is was "deeply disappointed" that the
bipartisan agreement faltered. "We will assess all of our options
to continue our restructuring and to obtain the means to weather
the current economic crisis," the company said.
      

Chrysler said it was also disappointed and would "continue to
pursue a workable solution to help ensure the future viability of
the company."
      


The companies efforts for funding failed after a marathon set of
negotiations at the Capitol among labor, the auto industry and
lawmakers who bargained into the night to salvage the auto bailout
at a time of soaring job losses and widespread economic turmoil.
      

The group came close to agreement, but it stalled over the UAW's
refusal to agree to wage cuts before their current contract expires
in 2011. Republicans, in turn, balked at giving the automakers
federal aid.
      

The UAW did not immediately react to the failure of the Senate
proposal.
      

Aid to the automakers gained urgency last week when the
government reported the economy had lost more than a half-million
jobs in November, the most in any month for more than 30 years.
      


The stunning disintegration of the auto bailout proposal was
eerily reminiscent of the defeat of the $700 billion Wall Street
bailout in the House, which sent the Dow tumbling and lawmakers
back to the drawing board to draft a new agreement to rescue
financial institutions and halt a broader economic meltdown. That
measure ultimately passed and was signed by Bush.
      


It wasn't immediately clear, however, how the auto aid measure
might be resurrected in a bailout-fatigued, postelection Congress,
with Bush's influence at a low ebb.
      


Earlier in the week, the House approved a bill that would have
created a Bush-appointed overseer to dole out the money. At the
same time, carmakers would be compelled to return the aid if the
"car czar" decided the carmakers hadn't done enough to
restructure by spring.
      

Some Senate Democrats joined Republicans in turning against the
House-passed bill, despite increasingly urgent expressions of
support from the White House and Obama for quick action to spare
the economy the added pain of a potential automaker collapse.

Gallery

Auto bailout stalled, GOP seeks UAW concessions

Murky future for auto rescue amid GOP opposition

Auto rescue bill in peril, opposed by GOP senators

U.S.
automakers are depending upon a reluctant White House to quickly
provide a multibillion lifeline to help them avoid imminent
collapse.

Bailout dead, automakers search for lifeline

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