WASHINGTON — Republican opposition killed a $14-billion auto industry bailout plan in the Senate on Thursday night, putting the future of U.S. automakers in doubt and threatening to deliver another blow to the economy.
The measure died after a last-ditch effort by Senate Democratic leaders to strike a compromise that would have lured enough support to save the legislation, which was crafted in consultation with the White House.
For The Record
Los Angeles Times Friday, December 19, 2008 Home Edition Main News Part A Page 2 National Desk 2 inches; 80 words Type of Material: Correction
Auto bailout: An article in Section A on Dec. 12 about the auto bailout bill dying in the Senate said that Democrats, who hold 50 votes in the chamber, couldn't bring the measure up for a vote without the support of at least 10 Republicans. In fact, 10 Republicans did vote to bring the measure up, but not all 50 Democrats did. The final vote was 52 to 35, with 10 Republicans joining 40 Democrats and 2 independents in favor.
The bill's failure raises the possibility of bankruptcy by one or more of Detroit's Big Three and puts new pressure on President Bush to authorize emergency loans for the automakers from the $700-billion Wall Street rescue fund, a step he has adamantly refused to take.
The collapse of General Motors, Chrysler or Ford -- along with many of their suppliers and dealers -- could throw hundreds of thousands more workers onto the growing unemployment rolls and further cloud the closing days of the Bush administration.
"We will leave here tonight to go home for the holiday recesses, but for the literally hundreds of thousands of people whose jobs depend on this industry, this will not be a joyous season, wondering whether or not their jobs, their livelihoods, their homes, their children's futures are at risk," said Senate Banking Committee Chairman Christopher J. Dodd (D-Conn.).
White House spokesman Tony Fratto said the Bush administration was disappointed by the bill's failure and left the door open to the president taking action to provide funding.
"We think the legislation we negotiated provided an opportunity to use funds already appropriated for automakers, and presented the best chance to avoid a disorderly bankruptcy while ensuring taxpayer funds only go to firms whose stakeholders were prepared to make difficult decisions to become viable," Fratto said. "We will evaluate our options in light of the breakdown in Congress."
After the vote, GM issued a statement saying it was "deeply disappointed" that a deal could not be reached. "We will assess all of our options to continue our restructuring and to obtain the means to weather the current economic crisis," spokesman Tony Cervone said.
Chrysler said in a statement that it was "obviously disappointed in what transpired in the Senate and will continue to pursue a workable solution to help ensure the future viability of the company."
Ford had no immediate comment.
