Unconvinced, congress rejects $25 billion auto bailout plan

Washington, November 21: Congressional leaders on Thursday refused to provide an assistance of $25 billion, from financial rescue fund of $700 billion, to the struggling auto industry.

House Speaker Nancy Pelosi (D-Calif.), and Senate Majority leader Harry M. Reid (D-Nev.) ordered the Big Three (General Motors Corp, Ford Motor Co and Chrysler LLC) to submit a detailed proposal of their business survival plans by Dec. 2.

Pelosi said, “It is all about accountability and viability.” She added, “Until they show us the plan, we cannot show them the money."

Senate Democratic leader Harry Reid said that the Big Three could not convince the democratic leaders about financial bailout. If they come out with some new plans of rebuilding and modernizing their industries by Dec.2, then the same congressional committee will hold a hearing in the first week of December.

The chief executive officers of the Big Three said that they have been demanding a financial rescue package that aids both the credit markets and the ability of customers to buy vehicles. While General Motors (GM) is requesting $10-$12 billion in loans, Ford is asking for $7-$8 billion and Chrysler is requesting $7 billion.

GM, the largest and weakest of the firms, needs cash fast and if a federal bailout is not approved by December, slumping auto sales will quickly push the firm into bankruptcy.

In a press conference in Detroit, United Auto Workers president, Ron Gettelfinger, said, "Without immediate assistance, we could see...a collapse of one or more of the domestic auto companies by the end of this year and ‘hundreds of thousands’ of workers would lose their jobs if the Big Three are forced to liquidate.”

Christopher J Dodd, The Chairman of U.S. Senate Committee on Banking, Housing and Urban Affairs said, “the industry needs help to avoid a deeper wound to the U.S. economy.”

"At a time like this, when our economic future is so tenuous, we must do all we can to ensure stability," Dodd added.