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$14 Billion auto bailout plan fails in Senate
By siliconindia
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Friday, 12 December 2008, 20:00 IST |
2 Comments
Washington: Dealing a further blow to already troubled U.S. automobile industry, the Senate failed to reach consensus on a $14 billion plan to bail out the auto firms General Motors and Chrysler as Republicans objected a bill passed earlier with the support of White House. Earlier, the United Auto Workers had shown disagreement to the demands for swift wage cuts by Republicans. After the talks fell apart, the Senate rejected the bailout 52-35 on a procedural vote, well short of the required 60. The talks collapsed over GOP demands that the United Auto Workers union agree to steep wage cuts by 2009 to bring their pay into line with Japanese car makers.
Both General Motors and Chrysler have said that they do not have enough money to get through the end of the year. Ford has asked for no immediate money but says bankruptcy by the others could pull it down.
The three companies presently are employing up to 2.6 million jobs, about 1.9 percent of the U.S. work force. The collapse of the bailout plan is likely to affect to these jobs. Of the total employees, 255,000 people are directly employed to these companies and an additional 2.3 million are indirect employees, who are from the steel, glass, fabric, tire and electronics industries. Moreover, Asian markets have fallen down five percent followed by the failure of the bailout plan.
In a statement, GM said, "It is deeply disappointed that the bipartisan agreement faltered. We will assess all of our options to continue our restructuring and to obtain the means to weather the current economic crisis."