WASHINGTON (AFP) - Democratic lawmakers Saturday neared a deal to loan billions of dollars to struggling U.S. automakers, with a vote looming next week on the bid to avert the collapse of a major U.S. industry.
The short-term loan package of at least $15 billion could be a lifeline to keep the Big Three automakers afloat, but is about half what auto chiefs say is needed to stave off bankruptcy.
After locking horns with the White House over whether to borrow cash from a federal loan program for green auto technologies, Democrats dropped their opposition following the release of gloomy data that showed the loss of 533,000 U.S. jobs last month alone.
As auto chiefs pleaded for an urgent rescue, Democrat House Speaker Nancy Pelosi signaled her approval for a loan from the $25 billion energy-efficient stimulus fund but said the "short-term and limited assistance" must be swiftly repaid.
"We will not permit any funds to be borrowed from the advanced technology program unless there is a guarantee that those funds will be replenished in a matter of weeks so as not to delay that crucial initiative," she said.
Chiefs of General Motors (GM), Chrysler and Ford (F), which employ millions of American workers, this week threatened the industry's imminent demise if Congress and the White House didn't reach a compromise on the funding showdown.
Democrats previously called on the White House to tap an already approved $700 billion finance industry bailout known as the Troubled Assets Relief Program (TARP) to rescue the firms.
But President George W. Bush insisted the money should come from diverting $25 billion in loans for the industry to develop fuel-efficient vehicles.
Media reports said the loan package could be worth $15 billion to $17 billion, or about half of the $34 billion bailout Big Three chiefs said was necessary for them to survive.
Congressional aides told the Washington Post that the package aimed to sustain automakers through March, when president-elect Barack Obama will have taken over from his predecessor and the new House and Senate are in office.
Legislation on the plan is expected to be "brought up for a vote in the House next week," said Pelosi.
The compromise is expected to free up the remaining 350 billion dollars from the $700 billion TARP fund to bail out the financial industry.
Senate Majority leader Harry Reid said he hoped his chamber would also vote on a bailout in a lame duck session, and pressured Republicans to help push the rescue bill through.
"We will need support and cooperation from Republicans to determine when that vote happens and whether it will succeed," Reid said, adding that the auto hearings this week "made clear that we cannot let these companies fail."
Bush warned after the half-a-million job loss announcement for November that at least one of the Big Three automakers may not weather the current economic storm.
Expressing skepticism of an industry rescue, Bush said: "I am concerned about taxpayer money being provided to those companies that may not survive."
In the hearings before Congress Ford CEO Alan Mulally made clear the failure of one of the major companies could result in the demise of its competitors.
"If one of us goes in, it has the potential to take all of us in," he said.
In exchange for any assistance, the auto companies will have to submit to strict government oversight to make sure that the bailout funds are used to carry out the extensive reorganization plans they delivered to Congress earlier this week.
The bosses appeared at acrimonious hearings two weeks ago but were sent back to Detroit to retool their restructuring programs.
They returned to present plans that include cuts in jobs and costs, the sale of subsidiaries, and the demise of unprofitable models.
They also pledged to develop cars that run on new-generation fuels, and to submit their restructuring to a federal oversight board.
GM requested a total of $12 billion in short-term loans and a $6 billion line of credit, while Ford said it needed a $9 billion line of credit and Chrysler said it needed $7 billion by Dec. 31.
United Auto Workers chief Ron Gettelfinger warned on Thursday that time was short.
"I believe that we could lose GM by the end of the month," he said.
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(END) Dow Jones Newswires
December 06, 2008 13:16 ET (18:16 GMT)

Publié le 06 Décembre 2008 Copyright © 2008 Dowjones