US House approves $14-bn bail-out for car industry (Second Lead)December 11th, 2008 - 9:49 am ICT by IANS
Washington, Dec 11 (DPA) The US House of Representatives Wednesday approved a $14-billion emergency loan to keep the country’s car industry out of bankruptcy, sending the bill to a more skeptical Senate.House lawmakers approved the legislation by 237-170 after weeks of negotiations. The Senate could vote on Friday, but a group of Republican senators have vowed to oppose the loan and appeared to have enough support to block the legislation.
General Motors Corp, the world’s largest carmaker, and Chrysler LLC have said they will likely declare bankruptcy if they don’t get the federal “bridge loan,” which they argue is needed because of a sharp drop in car sales during the US recession.
Ford Motor Co said it does not need a rescue, but warned it could go under if one of its competitors fails.
The carmakers and politicians have argued the bill was necessary to preserve millions of jobs and keep the US economy from plunging into an even deeper and more protracted recession.
But the loan comes with tough conditions including the creation of a White House “car czar”, who would oversee the companies’ restructuring and could revoke the funds if they don’t cut costs by March 31.
House Speaker Nancy Pelosi, speaking ahead of the vote, said the loan was a chance for an iconic American industry “to get back on track” and make the necessary adjustments to return to viability.
But Senate Republicans earlier Wednesday said they would resist the bail-out. Some argued bankruptcy protection is a better option for an industry that has failed to modernize and keep up with foreign competitors.