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Us Car Bail-Out Fails in Senate
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by Sanjay Jha | December 11, 2008 at 11:26 pm
166 views | 15 Recommendations | 3 comments
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Even after getting nod from house of representative, The $14 billion bailout plan for the US auto industry has been rejected in the Senate Thursday night giving a big jolt to hopes of the struggling big three Chrysler, Ford and General Motors.
With this now it it is clear now that there will be no Congressional action on a bail-out this year.
The failure came after bipartisan talks on the rescue plan collapsed over Republican demands that the United Auto Workers union agree to swift wage cuts.
The White House said the bill had been the Big Three car makers' "best chance to avoid a disorderly bankruptcy".
The House of Representatives passed the White House-backed bill on Wednesday.
The Democrats needed some Republicans to back the bill in the Senate as they have a majority of just one, and some in their own party were expected to vote against.
'Three words away'
The BBC's Andy Gallacher in Washington says it was always going to be a battle to get the US Senate to approve the $14bn bridging loan.
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Sanjay Jha
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Most RecentMost Recommended Comments (3)
at 05:21 on December 12th, 2008
Billions for banks OK for the GOP, but no auto bailout without more union busting. The auto workers must pay.
Yep. that's sticking up for the little guy - more like sticking it TO the little guy.
What a perfect way for the GOP to end eight years of arrogant disregard for the average Americans.
at 06:52 on December 12th, 2008
I confess to working in a related industry; but the reality is that everyone from the lawyer in Los Angles to the hair dresser in Austin to the farmer in Kansas will be affected by a domestic auto bankruptcy. Autos and their suppliers are an integral part of the US manufacturing economy. They can not be isolated from the restaurants, bars, hotels, shopping centers, schools, grocery stores and other outlets that have been built around these facilities and communities of people whose livelihood is tied to this industry. Not to mention an already stressed housing market.
And no one will be spared. It may not become fatal for a Toyota or a Honda, but keep in mind most of their facilities are assembly plants, not manufacturing plants. So when a supplier which is 70% dedicated to a domestic goes out, the 30% of that business dedicated to a transplant manufacturer is also going to go away.
The US autos have a lot to change, but this point-in-time crisis is not their making -- it is a result of a global disruption to capital and credit markets which has artificially hastened the timeline of restructuring that they had already made significant progress toward.
at 23:36 on December 11th, 2008
This bail out is a bad Idea.