U.S. automaker bailout deal passes in House of Representatives

The U.S. House of Representatives on Wednesday passed legislation to speed $14 billion in emergency loans to struggling U.S. automakers, but the bailout was still in jeopardy from Republicans who were setting out roadblocks in the Senate.

The U.S. House of Representatives on Wednesday passed legislation to speed $14 billion in emergency loans to struggling U.S. automakers, but the bailout was still in jeopardy from Republicans who were setting out roadblocks in the Senate.

Democrats and the Republican administration of President George W. Bush hoped for a Senate vote as early as Thursday and enactment by week's end.

They argued that the loans authorized by the measure were needed to stave off disaster for the auto industry — and a crushing further blow to the reeling U.S. economy.

The legislation, approved 237-170 by the House, would provide money within days to cash-starved General Motors Corp. and Chrysler LLC. Ford Motor Co., which has said it has enough to stay afloat, would also be eligible for federal aid.

But earlier in the day, Senator George V. Voinovich, a Republican from Ohio and a leading supporter of the bailout, said it doesn't have the necessary Republican votes to pass Congress.

Bush administration officials who were dispatched to Capitol Hill to sell the agreement got an earful of criticism from Republican senators during a closed-door luncheon.

The revolt came as the House of Representatives began procedural votes on the package. Democrats are pushing to pass it this week.

The proposed bill would create a government "car czar" to dole out the loans, with the power to force the automakers into bankruptcy if they didn't cut quick deals with labour unions, creditors and others to restructure their businesses and become viable.

Republican senators Richard Shelby, centre, Tom Coburn, left, Jon Ensign, David Vitter and Jim DeMint speak to reporters about the auto bailout on Capitol Hill on Wednesday. ((Lauren Victoria Burke/Associated Press))
But congressional Republicans, left out of negotiations on the package, may seek to force changes to it or block it.

"We'll be talking retail to individual senators to win their support," said White House deputy chief of staff Joel Kaplan, who added he expects President George W. Bush to lobby Republicans to vote for the package.

Kaplan said it was critical that the legislation have a clear definition of what constitutes long-term viability for the companies.

A breakthrough came when Democrats agreed to scrap language — which the White House had called a poison pill — that would have forced the automakers to drop lawsuits challenging tough emissions limits in California and other states, said congressional aides.

Environmentalists already were livid that the measure draws the emergency loans from an existing loan program to help automakers retool their factories to make greener cars.

Kaplan said the Bush administration would work with president-elect Barack Obama's team on choosing the so-called "car czar," acknowledging that Bush's tenure ends in 41 days and the automakers' woes will continue well into 2009.

"We expect to work closely with the president-elect's team on what is the most effective means of implementing this legislation," Kaplan said.

Ontario, federal government consider aid

In Canada, the federal and Ontario governments have been watching the negotiations in Washington closely and are under pressure to provide assistance to the Detroit-based automakers as well.

General Motors of Canada has requested loans totalling $2.4 billion, saying it needs $800 million of that amount urgently. Chrysler Canada is seeking a loan of $1.6 billion, while Ford of Canada is asking for a $2-billion line of credit that it can draw upon if necessary.

Ontario Premier Dalton McGuinty said Wednesday he wants the companies to release to the public the restructuring plans they submitted last week to the two levels of government.

"How many jobs are we going to lose?" Mr. McGuinty asked, even if automakers are given government aid packages.

A spokesman for General Motors of Canada Ltd. indicated that the company is prepared to release its plan. However, Ford Motor Co. of Canada and Chrysler have reportedly resisted calls to release their plans.