Articles | Bail-out for US car-makers

Bail-out for US car-makers

Published: Sunday, 7 December 2008, 4:10PM

Democratic leaders and the White House have reached a deal to provide billions of dollars in relief to the ailing US auto industry.

The package, which Democratic leaders hope to formalise with George W Bush next week, totals between $15 billion (£10.2 billion) and $17 billion (£11.6 billion).

The amount is far less than the $34 billion (£23 billion) requested by General Motors, Ford, and Chrysler, but Democratic leaders believe the money will keep them going until Barack Obama replaces Bush as president in January and a new effort can be made for a rescue plan.

House Financial Services Committee Chairman, Barney Frank, said Mr Obama, is "going to have to be more assertive than he's been" in relation to the rescue package.

"For us to do nothing, to allow bankruptcies and failures in one, two or three of these companies in the midst of the worst credit crisis and the worst unemployment situation that we've had in 70 years would be a disaster," Mr Frank said.

"There is a sufficient consensus that we have to do something."

He added: "I am more optimistic than I was before."

Figures revealed for November saw the worst month of job losses in the US for 34 years.

The three executives from General Motors, Ford, and Chrysler made the 520-mile trip to the hearing from Detroit in hybrid cars - their response to stinging criticism from members of Congress for making their last trip in corporate jets.