By Thomas Ferraro and Donna Smith
WASHINGTON, Dec 7 (Reuters) - White House and congressional negotiators sought on Sunday to remove remaining differences over an emergency rescue for the struggling auto industry, a stark symbol of the deepening U.S. economic crisis.
Prodded by shock unemployment figures which showed the country shed more than half a million jobs in November alone, negotiators tried to forge an agreement in principle to provide 'The Big Three' American automakers with at least $15 billion in short-term loans.
Backers hope to win congressional passage this week. The measure would then be sent to President George W. Bush as one of the last ones he signs into law before Democrat Barack Obama succeeds him as president on Jan. 20.
The Senate is due back in session on Monday and negotiators hope to have a package ready that can win quick approval.
Lawmakers fear a recession will deepen if any of the three giant companies -- GM, Ford and Chrysler -- collapses. Some from Bush's Republican party don't want another rescue plan following a $700 billion Wall Street rescue package triggered voter backlash in the Nov. 4 congressional elections.
Critics also say market forces ought to determine the fate of the auto industry, not intervention from a government saddled with a record deficit.
Bailout backers say that since the government helped Wall Street, it must also help hundreds of thousands of blue-collar auto workers who have the support of Democrats.
Obama added his weight to the drive, saying while the car companies had made mistakes, letting them collapse was not an option -- although they must be forced to radically revamp their operations.
'I think that Congress is doing the exact right thing by asking for a conditions-based assistance package that holds the auto industry's feet to the fire,' he said, adding that new management could also be an option.
'If this management team that's currently in place doesn't understand the urgency of the situation and is not willing to make the tough choices and adapt to these new circumstances, then they should go,' he said at a news conference in Chicago.
CONDITIONS AND CONCESSIONS
In addition to reorganizing and protecting taxpayer investment, possible conditions include creating a government 'car czar' to oversee the bailout and additional concessions by the United Auto Workers (UAW) union.
A UAW official, speaking after a Detroit church service dedicated to prayers for the auto industry, said on Sunday the union was open to moves by Chrysler to seek an alliance with a rival automaker as long as it saves as many jobs as possible.
Congressional aides said it was as yet unclear whether companies would have to implement at least some of the conditions or merely promise them before getting any money.
Senate Banking Committee Chairman Christopher Dodd said GM chairman Rick Wagoner should resign to allow new leadership to restructure the faltering company.
'He has to move on,' Dodd, a Connecticut Democrat who is leading efforts to craft bailout legislation, told CBS's 'Face the Nation.'
Faced with plummeting sales they blame largely on the credit crunch and recession, GM, Chrysler and Ford sought $34 billion from Congress last week to avoid possible collapse. A deal negotiated by the White House and Congress would provide no more than $17 billion to last into March.
Critics have said any loans would be a waste of money unless U.S. automakers were able to cut costs and better compete with more fuel-efficient, foreign-made cars.
Democratic Sen. Carl Levin of Michigan, home to the major automakers, said he was confident there would be a deal in the next 24 hours. But he was less certain if backers would garner the 60 votes needed in the 100-seat Senate to avoid a Republican procedural hurdle known as a filibuster.
'That's a much more complicated question,' Levin said on 'Fox News Sunday'.
Senate Republican Leader Mitch McConnell earlier indicated he might support a bailout if it had adequate safeguards. But Sen. Richard Shelby, an Alabama Republican who has spoken out against the proposed 'bridge loan' emergency package, indicated he was ready for battle.
'This is a bridge loan to nowhere,' said Shelby, appearing with Levin on 'Fox News Sunday.'
UNKNOWN FUTURE
Despite the progress in Washington, America's auto industry is headed into an unknown future.
GM and Chrysler, along with Ford once bywords for U.S. industrial power, are both headed for wrenching restructuring under federal oversight that will hit their investors, creditors, dealers and workers almost as hard as if they had filed for bankruptcy protection.
Ford is in slightly better financial shape, but all three are expected to continue to mothball plants and dismiss tens of thousands of employees.
A breakthrough in the auto crisis emerged on Friday after the federal government reported an unexpectedly sharp rise in U.S. unemployment in November.
Employers slashed more than 533,000 jobs, the highest monthly decline in 34 years, and lawmakers feared hundreds of thousands more would be thrown out of work if any of the major automakers went down.
The Bush administration and congressional Democrats agreed later on the size of the planned rescue -- $15 billion to $17 billion in bridge loans to carry them into March.
(Additional reporting by John Crawley in Washington and Kevin Krolicki in Detroit; editing by Cynthia Osterman) Keywords: AUTOS/BAILOUT (thomas.ferraro@thomsonreuters.com; 1-202-789-8015; Reuters Messaging: thomas.ferraro.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2008. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
WASHINGTON, Dec 7 (Reuters) - White House and congressional negotiators sought on Sunday to remove remaining differences over an emergency rescue for the struggling auto industry, a stark symbol of the deepening U.S. economic crisis.
Prodded by shock unemployment figures which showed the country shed more than half a million jobs in November alone, negotiators tried to forge an agreement in principle to provide 'The Big Three' American automakers with at least $15 billion in short-term loans.
Backers hope to win congressional passage this week. The measure would then be sent to President George W. Bush as one of the last ones he signs into law before Democrat Barack Obama succeeds him as president on Jan. 20.
The Senate is due back in session on Monday and negotiators hope to have a package ready that can win quick approval.
Lawmakers fear a recession will deepen if any of the three giant companies -- GM, Ford and Chrysler -- collapses. Some from Bush's Republican party don't want another rescue plan following a $700 billion Wall Street rescue package triggered voter backlash in the Nov. 4 congressional elections.
Critics also say market forces ought to determine the fate of the auto industry, not intervention from a government saddled with a record deficit.
Bailout backers say that since the government helped Wall Street, it must also help hundreds of thousands of blue-collar auto workers who have the support of Democrats.
Obama added his weight to the drive, saying while the car companies had made mistakes, letting them collapse was not an option -- although they must be forced to radically revamp their operations.
'I think that Congress is doing the exact right thing by asking for a conditions-based assistance package that holds the auto industry's feet to the fire,' he said, adding that new management could also be an option.
'If this management team that's currently in place doesn't understand the urgency of the situation and is not willing to make the tough choices and adapt to these new circumstances, then they should go,' he said at a news conference in Chicago.
CONDITIONS AND CONCESSIONS
In addition to reorganizing and protecting taxpayer investment, possible conditions include creating a government 'car czar' to oversee the bailout and additional concessions by the United Auto Workers (UAW) union.
A UAW official, speaking after a Detroit church service dedicated to prayers for the auto industry, said on Sunday the union was open to moves by Chrysler to seek an alliance with a rival automaker as long as it saves as many jobs as possible.
Congressional aides said it was as yet unclear whether companies would have to implement at least some of the conditions or merely promise them before getting any money.
Senate Banking Committee Chairman Christopher Dodd said GM chairman Rick Wagoner should resign to allow new leadership to restructure the faltering company.
'He has to move on,' Dodd, a Connecticut Democrat who is leading efforts to craft bailout legislation, told CBS's 'Face the Nation.'
Faced with plummeting sales they blame largely on the credit crunch and recession, GM, Chrysler and Ford sought $34 billion from Congress last week to avoid possible collapse. A deal negotiated by the White House and Congress would provide no more than $17 billion to last into March.
Critics have said any loans would be a waste of money unless U.S. automakers were able to cut costs and better compete with more fuel-efficient, foreign-made cars.
Democratic Sen. Carl Levin of Michigan, home to the major automakers, said he was confident there would be a deal in the next 24 hours. But he was less certain if backers would garner the 60 votes needed in the 100-seat Senate to avoid a Republican procedural hurdle known as a filibuster.
'That's a much more complicated question,' Levin said on 'Fox News Sunday'.
Senate Republican Leader Mitch McConnell earlier indicated he might support a bailout if it had adequate safeguards. But Sen. Richard Shelby, an Alabama Republican who has spoken out against the proposed 'bridge loan' emergency package, indicated he was ready for battle.
'This is a bridge loan to nowhere,' said Shelby, appearing with Levin on 'Fox News Sunday.'
UNKNOWN FUTURE
Despite the progress in Washington, America's auto industry is headed into an unknown future.
GM and Chrysler, along with Ford once bywords for U.S. industrial power, are both headed for wrenching restructuring under federal oversight that will hit their investors, creditors, dealers and workers almost as hard as if they had filed for bankruptcy protection.
Ford is in slightly better financial shape, but all three are expected to continue to mothball plants and dismiss tens of thousands of employees.
A breakthrough in the auto crisis emerged on Friday after the federal government reported an unexpectedly sharp rise in U.S. unemployment in November.
Employers slashed more than 533,000 jobs, the highest monthly decline in 34 years, and lawmakers feared hundreds of thousands more would be thrown out of work if any of the major automakers went down.
The Bush administration and congressional Democrats agreed later on the size of the planned rescue -- $15 billion to $17 billion in bridge loans to carry them into March.
(Additional reporting by John Crawley in Washington and Kevin Krolicki in Detroit; editing by Cynthia Osterman) Keywords: AUTOS/BAILOUT (thomas.ferraro@thomsonreuters.com; 1-202-789-8015; Reuters Messaging: thomas.ferraro.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2008. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.