A proposal to bail out the big three US automakers passed the House of Representatives but its prospects looked grim in the Senate where supporters faced an uphill struggle today to keep it alive.
"Gonna be tough, but haven't lost all hope," a Democratic aide said of the plan to provide up to $14 billion in loans to help avert possible collapse of one or more carmakers.
The bill, negotiated by Democrats and the Bush administration, cleared the House by 237-170 but appeared to be falling short of the 60 votes necessary to overcome procedural obstacles in the Senate.
Supporters say the measure is necessary to help prevent the threatened collapse of one or more of the once vaunted Detroit Three carmakers and avoid another jolt to a US economy already in recession.
"This is too big a disaster for us to invite," said Rep. John Dingell of Michigan, a Democratic ally of General Motors Corp, Ford Motor Co, and Chrysler LLC.
The White House publicly endorsed the plan hoping to win over Republicans sceptical of the rescue.
"We believe the legislation developed in recent days is an effective and responsible approach to deal with troubled automakers and ensure the necessary restructuring occurs," White House spokeswoman Dana Perino said in a statement.
Democrats fear government inaction could lead to an industry collapse that would cost hundreds of thousands of jobs in an economy where unemployment is already growing fast.
But prospects for passage in the Senate were grim. Democrats were short the 60 votes necessary to overcome procedural hurdles. Without the support of a dozen or more Republicans the bill would fail, a Democratic aide said.
"The critics have been very vocal. The question is where are the (Senate Republican) supporters of the Big Three," another Democratic aide said.
The House and Senate must pass an identical measure for President George W. Bush to sign into law. As written, the Senate bill differed slightly from the House version on emission and fuel standards.
The three companies directly employ 250,000 people and another 100,000 in related businesses. The industry says it accounts for 10 per cent of US jobs.
Shares of GM and Ford declined in extended trade today as Republicans voiced opposition. Ford stock fell to $3.16 from a $3.25 close and GM slipped to $4.53 from $4.60.
Credit markets also want the bailout to pass. Bankruptcy or failure of the Detroit Three would threaten billions of dollars of financial instruments, market analysts said.
GM and Chrysler are seeking billions by month's end to survive. Ford is seeking a line of credit to be tapped if its finances worsen more than expected in 2009.