U.S. car industry bail-out plan collapses in Senate
Friday, 12 December 2008, 19:32 IST
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Washington: Negotiations in the U.S. Senate on a $14 billion emergency loan for the ailing car industry have collapsed, leaving the fate of General Motors Corp and Chrysler LLC uncertain. The discussions failed late Thursday after the United Auto Workers union refused to agree to Republican demands for wage cuts and reduction in labour costs to the level of Japanese competitors operating in the US. "It's over with. I dread looking at Wall Street tomorrow. It's not going to be a pleasant sight," said Senate Majority Leader Harry Reid, a Democrat. He later said that there would be "no more work" on the bail-out until the "reconvening of the new Congress next year". The House of Representatives approved the $14 billion emergency loan Wednesday night, imposing strict oversight rules in exchange for keeping General Motors Corp and Chrysler LLC out of bankruptcy at least until April. But Senate Republicans vowed to oppose the same deal in the upper legislative chamber, where Democrats hold a much slimmer majority than in the House. Earlier Thursday, Reid said the two sides were working furiously towards a compromise. "Millions of Americans, not only the autoworkers, but people who sell cars, car dealerships, people who work on cars, are going to be directly impacted," said Reid. "It's going to be a very, very bad Christmas for a lot of people."
Source: IANS