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White House 'agrees' car bail-out Congress to vote on car bail-out
(about 18 hours later)
The White House and leading congressional Democrats have reached agreement on a $15bn (£10bn) bail-out for the "Big Three" US car firms. The US House of Representatives could vote on a $15bn (£10bn) bail-out of the US car industry as soon as Wednesday.
The White House and leading Congressional Democrats have reached broad agreement on the rescue package for the "Big Three" US car firms.
Administration officials say the tentative agreement covers key points but details still need clarification.Administration officials say the tentative agreement covers key points but details still need clarification.
General Motors and Chrysler say they risk ruin without the aid, while Ford says it may need funds in the future. While the House may schedule a vote on Wednesday, the measure could be held up for longer in the Senate.
US President George W Bush is said to want strict conditions attached to any agreement to bail out the firms. While the Democrats have a comfortable majority in the House of Representatives, they only have a majority of one in the current lame-duck Senate, so the bill may struggle to get through without extensive amendment.
He is said to be seeking tough oversight for the three car-makers to ensure that the money is accompanied by sound financial recovery plans.
This follows criticism that the $700bn bail-out of the financial sector was insufficiently detailed.
'Car Tsar'
Despite the continuing disagreements, analysts expect a deal to be agreed before the end of the week.The bosses of Ford, GM and Chrysler had been seeking more money
However, this would then have to be passed by both houses of Congress, before being finally signed off by Mr Bush.
And with the Democrats only having a majority of one in the current lame-duck Senate, some analysts say the bill may struggle to get through without extensive amendment.
"We want to complete this as soon as possible," said Harry Reid, Democratic majority leader in the Senate."We want to complete this as soon as possible," said Harry Reid, Democratic majority leader in the Senate.
"The American people want us to make a decision.""The American people want us to make a decision."
'Car Tsar'
General Motors and Chrysler say they risk ruin without immediate aid, while Ford says it may need funds in the future.
The bosses of Ford, GM and Chrysler had been seeking more money
President George W Bush is said to want strict conditions attached to any agreement to bail out the firms, including tough oversight for the three carmakers to ensure that the money is accompanied by sound financial recovery plans.
This follows criticism that the $700bn bail-out of the financial sector was insufficiently detailed.
Under the proposal, the government is expected to take non-voting shares in General Motors, Ford and Chrysler.Under the proposal, the government is expected to take non-voting shares in General Motors, Ford and Chrysler.
Also expected is the appointment of a "Car Tsar" to oversee the money. The government is also expected to appoint of a "Car Tsar" to oversee the use of the money.
The three firms had been calling for $25bn between them, and their bosses recently went before Congress to push their case. The three firms had been calling for $34bn between them, and their bosses recently went before Congress to put their case.
'Disappointed''Disappointed'
GM, Ford and Chrysler have all seen sales fall sharply this year in their home market.GM, Ford and Chrysler have all seen sales fall sharply this year in their home market.
While this decline reflects an industry-wide fall that has also hit European and Japanese carmakers in the US, the "Big Three" have also been criticised for offering too narrow a range of vehicles. While this decline reflects an industry-wide fall that has also hit European and Japanese carmakers in the US, the Big Three have also been criticised for not offering an attractive range of vehicles.
They have been said to be too slow in responding to the growing popularity of smaller, more fuel-efficient vehicles.They have been said to be too slow in responding to the growing popularity of smaller, more fuel-efficient vehicles.
GM admitted on Monday that it had "disappointed" American consumers by letting "our quality fall below industry standards and our designs became lacklustre".GM admitted on Monday that it had "disappointed" American consumers by letting "our quality fall below industry standards and our designs became lacklustre".