Page last updated at 23:06 GMT, Friday, 5 December 2008

Aid for US carmakers now 'urgent'

Bush's 'concern' about car firms

The latest bleak US unemployment figures makes helping the big three car firms even more urgent, a leading politician has warned.

GM, Ford and Chrysler bosses faced Congress for a second day of questions, but no bailout has so far been agreed.

The committee chairman, Democrat Barney Frank, warned that to do nothing "would be a disaster".

The carmakers have faced considerable opposition to their plea for a $34bn (23bn) rescue plan.

Friday saw the latest US jobless figures, and the news that US companies axed 533,000 jobs in November, the most in 34 years. The unemployment rate rose to 6.7% from 6.5% in October.

Adding to these figures, GM said on Friday it would lay off 2,000 more workers early next year in the US, because of falling car sales.

This is about survival at this point in time - there's going to be, unfortunately, losses
Ron Gettlefinger, United Auto Workers President

Mr Frank said the data showed that helping the troubled car industry had become a greater priority.

"For us to do nothing, to allow bankruptcies and failures in one or three of these companies in the midst of the worst economic situation since the Great Depression, it would be an unmitigated disaster."

But he said the US was being "held hostage" by the political debate raging over how to help Detroit's carmakers.

No agreement

In a statement at the White House, President Bush said he was "concerned about the viability of the automobile companies".

"Likewise I am concerned about taxpayers' money being provided to those companies that may not survive," he said.

Broad consensus exists between Congress and the Bush administration that the carmakers need help, but officials have so far been unable to reach agreement on how to do it, with some lawmakers opposed to doing anything at all.

DETROIT'S BIG THREE
US November car sales compared with a year earlier:
GM: down 41% to 154,877
Ford: down 30% to 118,818 (excluding Volvo)
Chrysler: down 47% to 85,260

The White House does not want to use any of the banks' $700bn bailout, saying that this money is intended only to help stabilise the financial sector.

In his statement President Bush 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.

However, congressional Democrats oppose this and insist the money should come from the bank rescue fund, known as the Troubled Asset Relief Programme (TARP).

Admitting mistakes

The appearance of the three executives in Washington is the second time they have appealed to government for help - just two weeks ago Congress rejected their request for a $25bn loan.

In a show of contrition and prudence, this time the men abandoned their private jets and drove to Washington in hybrid cars.

But their sense of urgency has only heightened, with General Motors boss Rick Wagoner warning that without help the company could go under within weeks.

The chief executives of Ford and GM have even offered to work for $1 a year if Congress approves the emergency aid.

From left: GM boss Rick Wagoner, Ford boss Alan Mulally and Chrysler's  Bob Nardelli
The three bosses have warned of collapse without a bailout

The main car workers union said it had accepted the necessity of job cuts in the industry.

United Auto Workers President, Ron Gettelfinger, told the committee "This is about survival at this point in time, there's going to be, unfortunately, losses."

The carmakers argued that the collapse of any one of them would have disastrous effects on the whole US economy.

Mr Wagoner, Ford's Alan Mulally and Chrysler boss Bob Nardelli all blamed the US recession for decimating sales and leaving their companies in desperate need of cash.

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FROM OTHER NEWS SITES
Kokomo Tribune Partial plan is Big 3's last hope - 2 hrs ago
810WGY Barney Frank urges WH bailout automakers - 4 hrs ago
The Detroit Free Press Partial plan is automakers' last hope - 4 hrs ago
NewsNet 5 White House, Congress Talk $15B Auto Bailout - 5 hrs ago



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