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Carmakers' bailout stalls at US Senate

Video by Oliver FARRY , Marina BERTSCH

Latest update : 2008-12-13

Amid frantic negotiations to try to secure Republican backing for a multi-billion dollar bailout for automakers, US Senate Majority Leader Harry Reid announced that the Senate had failed to reach a compromise deal.

Reuters - The U.S. Senate failed on Thursday night to reach a last-ditch compromise to bail out automakers, effectively killing any chance of congressional action this year.

 

Republican-brokered talks faltered, leaving the chamber at a dead end on an approach for extending $14 billion in loans to avert a threatened collapse of one or more automakers, Senate Majority Leader Harry Reid said in remarks on the floor.

 

"It's over with," Reid said.

 

Lawmakers planned to move ahead with a procedural vote on a Democratic-sponsored bill negotiated with the White House that Reid admitted would not succeed.

 

"There is too much difference" between negotiators to reach an agreement," the Nevada Democrat said.

 

 The late night development followed intense discussions on a possible compromise that participants said fell apart over proposed wage concessions by the powerful United Auto Workers.

 

"We were three words away from a deal," said Sen. Bob Corker, a Tennessee Republican who proposed the alternative and led the talks.

 

Sen. Christopher Dodd, a Connecticut Democrat, said the main issue of disagreement was the date to require the Detroit autoworkers' pay parity with foreign auto manufacturers.

 

General Motors Corp and Chrysler LLC are seeking billions of dollars in immediate aid, while Ford Motor Co wants a hefty line of credit.

 

The industry is reeling from depressed sales, made worse by the credit crunch and the recession and GM and Chrysler said government intervention was required now to avert potential failure.

 

The House of Representatives passed its version of a Democratic-sponsored bailout on Wednesday but Senate Republicans rejected that measure.

 

 A Senate aide said congressional debate on the bailout legislation is over for this year and is "now up to Secretary Paulson" on whether to use Treasury Department's TARP funds to help the industry.

 

Polls show Americans split on bailing out the Detroit automakers, widely criticized for fighting tougher fuel efficiency standards and poor model designs that have left the companies gasping for life with a stable of products losing popularity with consumers.

 

Because of their shared suppliers and vendors, industry fears the failure of one Detroit manufacturer could drag down the other two as well as other businesses.

 

GM, Ford and Chrysler employ nearly 250,000 people directly, and 100,000 more jobs at parts suppliers could hang on their survival. The companies say 1-in-10 U.S. jobs are related to the auto sector.

 

Date created : 2008-12-12

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