Thursday December 11, 10:31 AM
House backs US auto industry rescue; vote shifts to Senate
By Emmanuel Parisse
WASHINGTON (AFP) - The House of Representatives approved a 14-billion-dollar government lifeline for the teetering US auto industry, but the proposal still faces possible defeat in the Senate amid stiff Republican opposition.
The plan passed 237 to 170 late on Wednesday following several hours of intense debate, and after senior Democrats in Congress and the White House hammered out a bridge loan deal to rescue the Big Three automakers.
The bill now moves to the Senate, where strong Republican opposition in a chamber with a razor-thin Democratic majority threatens to derail the legislation.
The rescue funds for the bailout are to be drawn from a loan program set up previously to bankroll the development of fuel-efficient cars.
The initial plan called for up to 15 billion dollars (11.4 billion euros) but in the end lawmakers chose to leave some funds remaining in the loan program for use by smaller companies, US media reported.
At the end of floor debate, House Speaker Nancy Pelosi said the plan would serve as "a jumpstart for an industry and our country's economic health."
The bill "sets us on a new path to viability. It is a test. And we will soon see in a matter of weeks if the executive suites in Detroit are willing to make the choices" laid out in the legislation.
In the most sweeping intervention in US industry in years, The Auto Industry Financing and Restructuring Act calls for emergency government loans to the car companies within days to be overseen by a "car czar" appointed by outgoing President George W. Bush.
In return, automakers by March 31 would have to cut costs, settle debts and make other changes to show a path to profitability or face possible bankruptcy.
The government could choose to revoke the loans if the companies fail to make progress, or could refuse further assistance after March 31 if the Big Three have no promising survival plan, officials said.
The White House hailed the vote Wednesday night, with spokeswoman Dana Perino calling the bill "an effective and responsible approach to deal with troubled automakers and ensure the necessary restructuring occurs."
But there were serious doubts voiced Bush's fellow Republicans, who warned the intervention was doomed and would only postpone a day of reckoning for the car companies and autoworkers' union.
Republican Representative Tom Feeney slammed it as a "short-term solution" that would merely drain federal coffers and burden taxpayers.
"Micro-managing a business from Washington is the supreme act of hubris. It will never work," he said on the House floor.
Republican Senator Richard Shelby of Alabama called it "a travesty" and vowed to block a vote on the plan.
"I'm going to oppose the package because I think this is just the down payment on billions and billions to come," he said. "These are failed or failing companies."
Influential House Financial Services Committee Chairman Barney Frank, one of the bill's architects, acknowledged the extent of opposition in the Senate.
The proposed short-term loans are meant to sustain the car giants through March, allowing president-elect Barack Obama time to address the crisis after he takes office on January 20.
GM (NYSE: GM - news) and Chrysler are first in line, after warning they are fast running out of cash. Ford, though equally hampered by slumping sales, says it faces no immediate liquidity crisis but wants a nine-billion-dollar line of credit.
|
|
|
Send Article by Email
Send Article by IM
Blog This with Y! 360
Printable View
