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US in new push for auto bailout 'Progress' in US auto bail-out
(about 9 hours later)
The US authorities are stepping up efforts to agree a deal worth billions of dollars to bail out the country's three big carmakers. Progress has been made on a multi-million dollar bail-out deal for the three big US carmakers, officials say.
Congress and the White House will hold talks over the weekend on a deal after two days of Congressional hearings. Congress and the White House are holding weekend talks on the plan after two days of Congressional hearings.
A White House spokesman said progress was expected, and House Speaker Nancy Pelosi said she wanted a vote on the package next week. White House Press Secretary Dana Perino said talks with members of both parties had been "constructive".
Her comments followed news of huge job losses in the US in November. House Speaker Nancy Pelosi wants a vote on the plan next week, and is said to have accepted White House conditions on the source of the bail-out funding.
In a dramatic indication of the worsening economic situation, the unemployment rate rose to a 15-year high of 6.7% from 6.5% in October, with more than 533,000 jobs lost. Bosses from the three big car companies - General Motors, Ford and Chrysler - have appeared before two Congressional committees pleading for $34bn (£23bn) to prevent collapse.
President-elect Barack Obama has called for urgent measures to stimulate the economy and get people back to work. They warn the collapse of any one of them would have disastrous effects on the whole US economy.
"There are no quick or easy fixes to this crisis...and it's likely to get worse before it gets better," he said in response to the announcement. The talks follow an announcement on Friday that more than half a million jobs were lost across the US in November, pushing the unemployment rate to a 15-year high in a dramatic indication of the country's worsening economic situation.
Hope of progressHope of progress
Bosses from the three big car companies, General Motors, Ford and Chrysler, appeared before two Congressional committees pleading for $34bn (£23bn) to prevent collapse. There has been considerable opposition to a carmaker bail-out plan. Critics say the manufacturers need to first show they can be more efficient. DETROIT'S BIG THREE US November car sales compared with a year earlier: GM: down 41% to 154,877Ford: down 30% to 118,818 (excluding Volvo)Chrysler: down 47% to 85,260 class="" href="/1/hi/business/7726439.stm">Why are the 'big three' in trouble?
The car manufacturers have warned that the collapse of any one of them would have disastrous effects on the whole US economy. A key stumbling block in the rescue talks had been over a White House stipulation that the aid be drawn from a $25bn fund set aside for the production of environmentally friendlier cars, which President George W Bush wants Congress to modify.
But there has been considerable opposition to a bailout plan - critics say the car manufacturers need to first show they can be more efficient. Ms Perino said on Saturday the use of this fund for the bail-out was central to any agreement, along with requirements that taxpayers are protected and that carmakers take tough business decisions.
But politicians who back the plans say to do nothing would be a disaster. "Taxpayers should not be asked to finance assistance for automakers without a strong likelihood that they will be paid back," she said.
DETROIT'S BIG THREE US November car sales compared with a year earlier: GM: down 41% to 154,877Ford: down 30% to 118,818 (excluding Volvo)Chrysler: down 47% to 85,260 class="" href="/1/hi/business/7726439.stm">Why are the big carmakers in trouble? Late on Friday, White House spokesman Anthony Warren said: "We continue to talk with Congress and we hope to make progress this weekend." Congressional Democrats had previously insisted the money should come from a bank rescue fund - known as the Troubled Asset Relief Programme (TARP) - rather than the fund for the production of environmentally friendlier cars.
The Democratic Senate majority leader, Harry Reid, said that support and co-operation from Republicans would determine when a vote would happen and whether it will succeed. But according to Congressional sources, Ms Pelosi, a Democrat, was prepared to yield on that condition, and she has suggested that the $25bn fund could be used under certain conditions.
President George W Bush earlier said he wanted Congress to act next week on a rescue plan for the car industry by modifying a $25bn fund which was set up to promote fuel-efficient technologies.
Congressional Democrats have opposed this move and insisted the money should come from the bank rescue fund, known as the Troubled Asset Relief Programme (TARP).
But Ms Pelosi appeared to suggest that the $25bn fund could be used under certain conditions.
"We will not permit any funds to be borrowed from the advanced technology programme 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."We will not permit any funds to be borrowed from the advanced technology programme 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.
"Regardless of the source, all funding needs will be tightly targeted with vigorous supervision and guaranteed taxpayer protection.""Regardless of the source, all funding needs will be tightly targeted with vigorous supervision and guaranteed taxpayer protection."
/> 		The automaker-bail-out plan is a stop-gap measure intended to help the three firms survive until the administration of President-elect Barack Obama takes over in January and can craft a longer-term solution, correspondents say.
Do you work at one of the three affected companies? Is the bailout deal a good idea? Please send your comment using the form below: Responding to Friday's announcement that 533,000 US jobs were lost in November, Mr Obama called for urgent measures to stimulate the US economy and get people back to work.
In most cases a selection of your comments will be published, displaying your name and location unless you state otherwise in the box below. "There are no quick or easy fixes to this crisis... and it's likely to get worse before it gets better," he said.
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