Page last updated at 23:28 GMT, Thursday, 11 December 2008

US Senate mulls car bail-out bill

General Motors dealership
The bill is expected to face a tough time in the Senate

Negotiations are going on in the US Senate to try to secure Republican backing for the $14bn (9.4bn) US car industry bail-out bill.

Democrat Majority Leader Harry Reid said talks were progressing, and the Senate could vote later on Thursday.

The House of Representatives passed the Democrat- and White House-backed bill on Wednesday, but the measure has faced opposition from Senate Republicans.

Many have said it is not strict enough on the "Big Three" US car firms.

The Democrats need some Republicans to back the bill as they have a majority of just one in the Senate, and some in their own party are expected to vote against.

'Explaining work'

Despite continuing efforts by the White House to persuade Republican senators to back the bill, some are continuing to declare their opposition.

John Ensign, a Republican senator from Nevada told CNBC television that he would throw up a procedural roadblock to the bill unless changes were made.

Any other senator who felt strongly enough could block the bill entirely by talking it out, with 60 votes needed to overcome such tactics.

White House spokesman Tony Fratto told the Associated Press news agency that there was still "some explaining to be done" to gather support for the bill.

President-elect Barack Obama said he was hopeful the bill would be passed.

Car tsar

General Motors and Chrysler say they risk ruin without immediate aid. Ford says it may need funds in the future.

The legislation would provide loans to car makers to keep them in business over the coming months.

It would also see the appointment of a "car tsar", named by President George W Bush, to oversee the money, and with the power to force the automakers into bankruptcy if they did not restructure their businesses to become viable.

The government is also expected to take non-voting shares in General Motors, Ford and Chrysler.

Republicans are said to prefer a plan that would demand concessions from auto-workers, encourage the car firms to declare bankruptcy and provide a system of government insurance that would protect private investment in the firms.

This follows criticism that the $700bn bail-out of the financial sector was insufficiently detailed.

The "Big Three" automakers would have until 31 March to submit plans to the "car tsar" detailing how they intend to restructure to ensure their longer-term survival, AP said.

The three firms called for $34bn between them when their bosses recently went before Congress to put their case.

'Disappointed'

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 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.

GM admitted on Monday that it had "disappointed" American consumers by letting "our quality fall below industry standards and our designs became lacklustre".

Print Sponsor


RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites


FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

BBC navigation

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.

Americas Africa Europe Middle East South Asia Asia Pacific