WASHINGTON — A $14 billion emergency bailout for U.S. automakers collapsed in the Senate Thursday night after the United Auto Workers refused to accede to Republican demands for swift wage cuts.
The collapse came after bipartisan talks on the auto rescue broke down over GOP demands that the United Auto Workers union agree to steep wage cuts by 2009 to bring their pay into line with Japanese carmakers.
Majority Leader Harry Reid said he hoped President George W. Bush would tap the $700 billion Wall Street bailout fund for emergency aid to the automakers. General Motors Corp. and Chrysler LLC have said they could be weeks from collapse. Ford Motor Co. says it does not need federal help now, but its survival is far from certain.
The White House said it was evaluating its options in light of the breakdown.
"It's disappointing that Congress failed to act tonight," a White House statement said. "We think the legislation we negotiated provided an opportunity to use funds already appropriated for automakers and 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."
The Senate rejected the bailout 52-35 on a procedural vote _ well short of the 60 required _ after the talks fell apart.
The implosion followed an unprecedented marathon negotiations at the Capitol among labor, the auto industry and lawmakers who bargained into the night in efforts 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.
Full Version: $14 billion auto bailout dies in Senate
Common Ground Common Sense > National & International News > Congress Watch > Congress Watch Archive
Senate Abandons Auto Bailout Bid
Talks Failure Raises Specter of Collapse for G.M., Chrysler
By DAVID M. HERSZENHORN and DAVID E. SANGER
Senate Republicans refused to support a bill endorsed by the White House and Congressional Democrats.
Auto Suppliers Share Anxiety Over a Bailout
By BILL VLASIC and LESLIE WAYNE
Auto suppliers are teetering on the verge of bankruptcy, and can't extend credit much longer.
Talks Failure Raises Specter of Collapse for G.M., Chrysler
By DAVID M. HERSZENHORN and DAVID E. SANGER
Senate Republicans refused to support a bill endorsed by the White House and Congressional Democrats.
Auto Suppliers Share Anxiety Over a Bailout
By BILL VLASIC and LESLIE WAYNE
Auto suppliers are teetering on the verge of bankruptcy, and can't extend credit much longer.
Asian Markets Sink on Auto Bailout Collapse
By BETTINA WASSENER
Stocks in Asian automakers were hard hit while regional indexes took a dive across the board.
By BETTINA WASSENER
Stocks in Asian automakers were hard hit while regional indexes took a dive across the board.
Rescue Bid for Detroit Collapses in Senate
A frantic, last-ditch attempt to forge an auto-relief package collapsed in the Senate over wages, dealing a giant blow to the Big Three. GM hired experts to help it explore bankruptcy protection.
It ain't over yet. There will be more discussions over the weekend. They will reach an agreement before Xmas.
My guess is full payment to vendors, 30 cents on the dollar to bondholders, wage and benny cuts to match Japanese makers, big cut on pensions and health care for retirees. And of course zippo for stockholders.
One way or the other, there is several hundred billion dollars worth of plant and equipment in Detroit. It is not going to be sent to China for recycling. Somebody is going to operate the new Detroit.
My guess is full payment to vendors, 30 cents on the dollar to bondholders, wage and benny cuts to match Japanese makers, big cut on pensions and health care for retirees. And of course zippo for stockholders.
One way or the other, there is several hundred billion dollars worth of plant and equipment in Detroit. It is not going to be sent to China for recycling. Somebody is going to operate the new Detroit.
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