White House, Democrats agree on auto industry bail-out

December 11th, 2008 - 2:45 am ICT by IANS  

Washington, Dec 11 (DPA) Democratic legislators and the White House have agreed on the outlines of a deal to keep the US car industry out of bankruptcy, offering a $15-billion loan in exchange for heavy government oversight.But the language of the deal was not finalised and it remained unclear if enough Republican legislators had signed on for the agreement to pass Congress.

US politicians have been haggling for weeks on the details of a car industry bail-out. A vote in the House of Representatives was considered possible later Wednesday, but leaders in the upper Senate said they may only vote over the weekend.

“We’ve made very substantial progress and have a good conceptual agreement (but) there’s still a lot of drafting going on up on Capitol Hill and language being exchanged back and forth,” said White House deputy chief of staff Joel Kaplan.

Many Republicans and some Democrats in Congress have resisted any bail-out for the US car industry, arguing bankruptcy protection is a better option for an industry that has failed to modernize and keep up with foreign competitors.

General Motors Corp, the world’s largest carmaker, and Chrysler LLC have said they will likely declare bankruptcy if they do not get an emergency cash infusion, which they argue is needed because of a sharp drop in car sales during the US recession.

Ford Motor Co has said it does not need the cash now, but warns that a failure of one of its competitors could bring it down as well.

Under the bill, the carmakers will have to demonstrate by April 30 at the latest that they have a long-term plan to restructure or the money will be withdrawn. The White House will appoint what has been dubbed a “car czar,” who will oversee the restructuring process and judge whether the carmakers have met the conditions.

Tags: , , , , , , , , ,

Posted in World |