| Senators reach bipartisan deal to aid US automakers | |
| Bloomberg / Washington November 21, 2008, 0:25 IST | |
Congressional leaders haven't said whether they support the plan.
A group of US senators reached a bipartisan agreement on aiding US automakers as Congress was running out of time this week to help the cash-starved companies.
No details were available, Tara Andringa, an aide to Senator Carl Levin, a Michigan Democrat, said in an e-mail. Levin and colleagues Debbie Stabenow, a Michigan Democrat; George Voinovich, an Ohio Republican, and Kit Bond, a Missouri Republican, scheduled a 2:30 pm news conference in Washington.
Congressional leaders haven't said whether they support the plan, and both houses could run out of time to enact legislation with a lame-duck session due to wrap up on Friday.
Senate Majority Leader Harry Reid on Wednesday refused to schedule floor time to debate a possible Bond compromise plan, though he said on Friday Congress might return in December to finish its work.
“The desire is we complete all of our actions until we come back on January 6, but that may not be possible,” the Nevada Democrat said. “It may be necessary that we come back after Thanksgiving.”
The Bush administration called on Congress to break its deadlock on a plan to bail out the Big Three automakers, saying a Republican measure would pass if put to a vote.
Senator Mitch McConnell, a Kentucky Republican, on Wednesday proposed expediting $25 billion Congress already approved for fuel-efficient vehicles and instead let the automakers use it for general liquidity. Bond said he was working out a compromise to do that and also retain requirements such as executive pay limits and government oversight that had been part of a Democratic plan.
The Democratic plan to help the automakers with funds from the recently approved $700 billion bank-rescue package stalled in the face of Republican opposition and a Bush veto threat. It may be revived after President-elect Barack Obama takes office in January and Democrats install strengthened majorities in both houses.
General Motors Corp, the largest US automaker, probably has weeks rather than months left before it runs out of cash without federal aid, said Jerome York, an adviser to billionaire Kirk Kerkorian and former GM board member.
GM Chief Executive Officer Rick Wagoner “all but said” at congressional hearings in the past two days that GM can't continue to operate until a new US administration takes over in January, York said in a Bloomberg Television interview on Thursday.
Wagoner said automakers would like action before Obama takes over because a global credit crunch that has slammed sales in the US is spreading to global auto markets.
GM said on November 7 it may run short of the $11 billion minimum cash it needs to pay its bills each month by the end of this year and will fall “significantly” short of that level by the middle of next year.
Shares of General Motors and Ford Motor Co soared on Thursday after a Senate Democratic aide said senators had reached agreement on a bipartisan auto aid deal. GM shares jumped more than 23 percent to $3.43 on the New York Stock Exchange, while shares of Ford climbed more than 34 percent to $1.69.
The big-three US automakers, including Chrysler, are pressing for a $25 billion bailout from the government to avert possible bankruptcy.
Meanwhile, Chrysler hopes to reboot merger talks with General Motors if Congress approves a $25 billion bailout for ailing US automakers, the Financial Times reported on Thursday. Talks between the two continue “at a very low level” but would be stepped up “immediately” if the bailout is approved, the paper said, citing an unnamed “person familiar with recent discussions.”
According to reports last month, the two automakers were exploring GM's possible acquisition of Chrysler, but in November, GM suspended the talks to focus on “immediate liquidity challenges,” the FT said.
Executives of the “Big Three” US automakers — GM, Ford and Chrysler — pleaded with lawmakers this week for a fresh $25 billion government loan to help them weather the financial crisis.
Chrysler chairman and chief executive Robert Nardelli told lawmakers Tuesday that Chrysler could run out of cash without “immediate” help from the government and may fail to emerge successfully from bankruptcy protection.
“Without immediate bridge financing support, Chrysler's liquidity could fall below the level necessary to sustain operations,” Nardelli said on Tuesday.
The Democrat-backed bailout remained stalled in the US Congress on Thursday as Republican lawmakers said the sector should use funds from a previous bill.
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