WASHINGTON, Nov. 20 (Agencies) – US automakers are unlikely to receive a USD 25 billion aid package after their request was met with objection by the Republicans.
A quick approval of the bailout plan requires Congress to endorse the plan by the weekend in the two remaining sessions before its mandate is over. Should Congress fail to reach a deal by then the bailout plan has to wait until the new Obama administration takes over in January.
"I won't say it's completely over. I'm still having conversations with people. But it doesn't look good," Sen. Robert Bennett (R-UT) said after the Wednesday session, Reuters reported.
This is while America's top three carmakers had held two days of talks asking the Congress for financial aid to survive the unfolding economic crisis.
“We are asking for assistance for one reason: to address the devastating auto industry recession caused by our nation's financial meltdown,” the head of Chrysler Corp Robert Nardelli, told the Senate Banking Committee on Tuesday.
Nardelli addressed the congress along with CEO of Ford Motor Co, Alan Mulally and CEO of General Motors Richard Wagoner a day after Senate Democrats offered to grant the automaker industry USD 25 billion in government-backed loans.
“Now, we believe we must join our competitors today asking for your support to gain access to an industry bridge loan to help us navigate through this difficult economic crisis,” Mulally said.
Wagoner in his address assured the senators that the government-backed loans would be paid back.
“…you can take our commitments that we will do everything we can to insure the money is paid back, paid back with interest and certainly it's understood that the expectations would be something additional whether it's warrants of whatever and we would fully agree to this,” he said.
Alabama Republican and a member of the committee Senator Richard Shelby, however, said the automakers are 'failed models' that should declare bankruptcy.
The executives' pleas came as GM and Ford shares dropped again on Tuesday. Since the beginning of the year, GM shares have fallen over 90 percent and Ford is also down 80 percent.
Chrysler, however, is closer to bankruptcy, as according to Nardelli, it may be forced to stop operating without immediate financial help.
The US government has already bailed out financial institutions such as mortgage lenders Fannie Mae and Freddie Mac regardless of objections to using taxpayer money for rescuing private firms.
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