QueenB4Liberty
12-11-2008, 10:40 PM
Auto bailout collapses in Senate
Negotiations to bring measure up for vote fall short, possibly dooming GM, Chrysler to bankruptcy.
NEW YORK (CNNMoney.com) -- Hopes for Congressional approval of a bailout of the U.S. auto industry appeared to fall apart late Thursday night as Senate leaders said Democrats and Republicans were unable to reach a compromised deal that could get the bipartisan support needed to bring the measure for the vote.
The 52-35 vote followed the collapse of negotiations between Senate Democrats and Republicans seeking a compromise that all sides could accept.
"We have worked and worked and we can spend all night tonight, tomorrow, Saturday, and Sunday, and we're not going to get to the finish line," Senate Majority Leader Harry Reid, D.-Nev.,said on the Senate floor before the vote. "That's just the way it is. There's too much difference between the two sides."
Reid acknowledged that the bill would not survive the procedural vote.
Senate Minority Leader Mitch McConnell, R-Ky., said the sticking point was the United Auto Workers' refusal to set a "date certain" to put employees at U.S. auto manufacturers at "parity pay" with U.S. employees at foreign automakers in the United States.
Currently, analysts estimate the union workers at U.S. automakers make about $3 to $4 per hour more than the non-union U.S. employees of foreign automakers like Toyota and Honda, according to the Center for Automotive Research.
The House easily passed the bailout bill earlier this week, but it quickly ran into trouble in the Senate where Republicans objected to several provisions. Negotiations Thursday involved a compromise proposal put forward by Sen. Bob Corker, R-Tenn., but the senators could not reach agreement.
The bill that passed the House Wednesday would have provided $14 billion in federal loans as a stopgap measure until the new Congress and the incoming Obama administration could reach a longer-term solution.
But Senate rules gave the Republican minority the ability to block a vote and and they did so by blocking an attempt to clear way for a vote on the measure.
The collapse of negotiations could possibly doom General Motors (GM, Fortune 500) to a bankruptcy and closure in the coming weeks, with Chrysler LLC potentially following close behind.
While Ford Motor (F, Fortune 500) has more cash on hand to avoid an immediate crisis, its production could be disrupted by problems in the supplier base, as could the production of overseas automakers with U.S. plants such as Toyota Motor (TM) and Honda Motor (HMC).
However, the Big Three could still wind up getting government funding. Bush officials warned wavering GOP senators earlier Thursday that if they didn't support the legislation, the White House will likely be forced to tap the Wall Street bailout to lend them money, two Republican congressional officials told CNN.
Negotiations to bring measure up for vote fall short, possibly dooming GM, Chrysler to bankruptcy.
NEW YORK (CNNMoney.com) -- Hopes for Congressional approval of a bailout of the U.S. auto industry appeared to fall apart late Thursday night as Senate leaders said Democrats and Republicans were unable to reach a compromised deal that could get the bipartisan support needed to bring the measure for the vote.
The 52-35 vote followed the collapse of negotiations between Senate Democrats and Republicans seeking a compromise that all sides could accept.
"We have worked and worked and we can spend all night tonight, tomorrow, Saturday, and Sunday, and we're not going to get to the finish line," Senate Majority Leader Harry Reid, D.-Nev.,said on the Senate floor before the vote. "That's just the way it is. There's too much difference between the two sides."
Reid acknowledged that the bill would not survive the procedural vote.
Senate Minority Leader Mitch McConnell, R-Ky., said the sticking point was the United Auto Workers' refusal to set a "date certain" to put employees at U.S. auto manufacturers at "parity pay" with U.S. employees at foreign automakers in the United States.
Currently, analysts estimate the union workers at U.S. automakers make about $3 to $4 per hour more than the non-union U.S. employees of foreign automakers like Toyota and Honda, according to the Center for Automotive Research.
The House easily passed the bailout bill earlier this week, but it quickly ran into trouble in the Senate where Republicans objected to several provisions. Negotiations Thursday involved a compromise proposal put forward by Sen. Bob Corker, R-Tenn., but the senators could not reach agreement.
The bill that passed the House Wednesday would have provided $14 billion in federal loans as a stopgap measure until the new Congress and the incoming Obama administration could reach a longer-term solution.
But Senate rules gave the Republican minority the ability to block a vote and and they did so by blocking an attempt to clear way for a vote on the measure.
The collapse of negotiations could possibly doom General Motors (GM, Fortune 500) to a bankruptcy and closure in the coming weeks, with Chrysler LLC potentially following close behind.
While Ford Motor (F, Fortune 500) has more cash on hand to avoid an immediate crisis, its production could be disrupted by problems in the supplier base, as could the production of overseas automakers with U.S. plants such as Toyota Motor (TM) and Honda Motor (HMC).
However, the Big Three could still wind up getting government funding. Bush officials warned wavering GOP senators earlier Thursday that if they didn't support the legislation, the White House will likely be forced to tap the Wall Street bailout to lend them money, two Republican congressional officials told CNN.