$14 billion emergency bailout for U.S. automakers collapsed in the Senate Thursday night after the United Auto Workers refused to accede to Republican demands for swift wage cuts. The collapse came after bipartisan talks on the auto rescue broke down over GOP demands that the United Auto Workers union agree to steep wage cuts by 2009 to bring their pay into line with Japanese carmakers.
Majority Leader Harry Reid said he hoped President George W. Bush would tap the $700 billion Wall Street bailout fund for emergency aid to the automakers. General Motors Corp. and Chrysler LLC have said they could be weeks from collapse. Ford Motor Co. says it does not need federal help now, but its survival is far from certain.
The White House said it was evaluating its options in light of the breakdown.
"It's disappointing that Congress failed to act tonight," a White House statement said. "We think the legislation we negotiated provided an opportunity to use funds already appropriated for automakers and presented the best chance to avoid a disorderly bankruptcy while ensuring taxpayer funds only go to firms whose stakeholders were prepared to make difficult decisions to become viable."
The Senate rejected the bailout 52-35 on a procedural vote -- well short of the 60 required -- after the talks fell apart. Now that the three giant automakers are not far from bankruptcy, millions of employees are also panicked about losing their jobs. This will exacerbate the already critical situation of unemployment in the US right now. Just last week, the government reported that the economy had lost more than a half-million jobs in November, the most in any month for more than 30 years.
2 comments:
I think this is an interesting situation. Its obvious that we cannot let the automakers fail, but i do feel that they should comply with requests of congress. They need the money and i dont think they should be picky about the details. These are very hard times and we need to get the economy back on track.
This is one problem with Unions. In times like these, especially in the American Auto-making industry, everyone needs to take pay-cuts to keep the industry going. However, Unions do not allow this to happen easily.
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