WHITE HOUSE and US congressional negotiators sought yesterday to remove remaining differences over an emergency rescue for the auto industry, a wounded giant of the struggling US economy.
Prodded by shock US unemployment figures which showed the country shed more than half a million jobs in November alone, negotiators tried to forge an agreement in principle to provide "the Big Three" American car manufacturers with at least $15 billion (€12 billion) in short-term loans.
Backers hope the plan will be passed by Congress this week. The measure would then be sent to President George W Bush as one of the last he signs into law before Democrat Barack Obama succeeds him as president.
The Senate is due back in session today and negotiators hope to have a package ready that can win quick approval. Lawmakers fear a recession will deepen if any of the three collapses.
But some Republicans are reluctant to approve another rescue plan after the $700 billion package they passed for Wall Street in October triggered voter backlash.
Critics also contend that market forces ought to determine the fate of the auto industry, not government intervention.
Bailout backers, however, argue that since the government helped Wall Street, it must also help hundreds of thousands of blue-collar auto workers who have the support of Democrats.
Mr Obama added his weight to the drive, saying that while General Motors, Ford and Chrysler had made mistakes, letting them collapse was not an option.
"The auto industry is the backbone of American manufacturing," Mr Obama said in a prerecorded interview with NBC's Meet the Press broadcast in the US last night. "What we have to do is to provide them with assistance, but that assistance is conditioned on them making significant adjustments," he said.
Possible conditions include creating a government "car czar" to oversee the bailout.
Faced with plummeting sales they blame largely on the credit crunch and recession, GM, Chrysler and Ford sought $34 billion from Congress last week.
A deal negotiated by the White House and Congress would provide enough cash to last into March.
- (Reuters)
