White House voted Wednesday to approve a $ 14 billion government rescue of the American automobile industry, but the bailout plan, which would provide emergency loans from General Motors and Chrysler, was in danger because of strong Republican opposition in Senate .
White House approved the rescue plan of 237 to 170, largely along party lines, mainly by 32 Republicans from states heavily dependent on the automotive industry joining 205 Democrats in supporting the measure. Voting against were 150 Republicans and 20 Democrats.
The White House has failed so far to generate support among Senate Republicans, who have the power to kill a bill.
General Motors and Chrysler have said they can not survive much longer without federal aid, while Ford Motor Company, which is in the best shape than its competitors, said he will not seek emergency loans.
As an automatic modification of the rescue plan, the House approved a measure that would require banks receiving assistance from the Treasury $ 700 billion program of economic stabilization to detail new loan activity in each quarter. White House chief of staff, Joshua B. Bolten, attended a lunch at the Capitol with Republican senators to persuade them to back self rescue plan, but encountered stiff resistance.
Some Republican senators said that automakers should be allowed to fail. Others said the proposed supervisory rescue of a so-called czar car was too low. V. Senator George Voinovich, a Republican, Ohio, which is one of the few outspoken Republican supporters of a taxpayer-supported rescue, occurred at noon that seems deeply pessimistic. Mr. Voinovich said that Senate Republicans refused to attend negotiations with the White House, because generally in opposition to a self bailout.
“The management did not want to participate because he felt that out of the negotiations, they probably would not support,” said Mr. Voinovich. He said he still intended to vote for the plan.
Republican leader, Senator Mitch McConnell of Kentucky, was noncommittal. The Republicans had a “spirited” discussion on self rescue plan, he said, but it was too early to take a stand only because they have received a final draft of the bill.
“Everybody is still kind of poring through it, trying to really tell exactly what to do,” Mr McConnell said. “At this particular moment, we could not handicap for you the level of support that may exist in our conference. But I did conferencewide begin a process of learning during the last hour.”
Even some auto-state lawmakers were unhappy with the bailout plan for the White House helped design. “While I am fighting to save Missouri auto jobs,” said Senator Christopher S. Bond, Republican of Missouri, “Congress is just putting the inevitable if they do not force companies to fundamental reform, which fails This latest plan to do and what is offered amendments to the workplace. ”
A number of other Senate Republicans said they had every intention of scuttling a taxpayer-financed rescue for General Motors and Chrysler.
Senator Richard C. Shelby of Alabama, the senior Republican on the banking committee, called the proposal “a travesty” and said he would filibuster the bill. “This is a rate on a huge bailout that will come later,” he said.
Others, while critical of the legislation, suggested there was hope for a compromise.
Senator Bob Corker, Republican of Tennessee, which was the draft of an alternative to legislation, said the proposal put forward by the White House and congressional Democrats provided the only weak car czar who would oversee the sweeping plans of reorganization automakers have agreed to perform.
“I have a bank staffer, who can fulfill the responsibilities of this so-called czar,” said Mr. stretcher. “That is a link. This person has no power.”
Corker, Lord said that the bill introduced by Democrats and the Bush administration and approved by the House and the federal government should meddle in the operations of auto companies for too long. Without substantial changes, he said, the legislation was unlikely to win passage in the Senate.
“I have not seen anyone in the group who is willing to blink,” he told reporters. An aide to Senate majority leader, Harry Reid of Nevada, said Democrats were trying to negotiate an understanding with Mr. McConnell that there would be more votes on measures designed to help the auto industry, including perhaps, alternative proposals by Mr. stretcher or other Republicans.
Some congressional Democrats speculated that if the Senate were Republicans kill the rescue plan, Secretary of Treasury Henry M. Paulson, Jr., would have no choice but to keep GM Chrysler afloat and At least until the new Congress begins early next month and wider democratic majorities are sworn into office.
In the compromise measure that emerged from negotiations with the White House, House Democrats agreed to drop a provision to force automakers to end their legal challenges to the emission standards state, including a lawsuit in California.
In a broader sense, the House bills and Senate provide an identical government rescue of two of the most imperiled automakers, GM and Chrysler, in the form of $ 14 billion of loans in case of emergency. In exchange for loans, auto producers should be subject to strict government supervision and carry out sweeping plans for reorganization.
G.M. has not said how it will respond if they are not federal loans future. It spends more than $ 2 billion in cash each month and is almost below falling to the minimum level of money needed to operate.
Without immediate federal assistance, G.M. would be in danger of failing to pay suppliers, employees and creditors, and may lose interest payments on its outstanding debt. Failure to pay creditors, for example, could lead to legal actions that lead to a forced bankruptcy filing.
“I would not like to speculate what would unfold, but suffice to say that the survival of the company as we know it would be very questionable if you do not get some bridge loan, vice chairman of GM, Robert Lutz, said in an interview on Monday.
The draft law would also give the government warrants to take an equity stake in automakers. It would limit executive pay, golden-bar packages, separation and parachute to prohibit the payment of dividends to shareholders while emergency government loans were outstanding.
The draft law would require companies and their stakeholders, including creditors, unions and distributors to agree on plans for sweeping reorganization that would lead to long-term financial viability. If they did not agree, the auto czar should be able to impose a plan, and could also force the company into bankruptcy if they failed to meet the requirements.
The plan seeks to save the auto industry from what White House senior official called “30 years of slow suicide.”
The draft law sets a March 31 deadline for automakers to produce long-term viability plans, but is not certain how the auto czar would determine viability. Joel Kaplan, deputy White House chief of staff, said that, “said simply, is that the company will have a positive when you want before you take into account all its costs.”
These costs include health services, pensions, salaries and research and development on new technologies, and depending on how they are accounted for companies - auto or czar - could tinker with the meaning of “viable . Mr. Kaplan said the White House goal was “a bridge to be fundamental restructuring or bankruptcy.”
The draft law would need permission to require automakers to auto czar for any transaction of business of 100 million $ or more. Congressional Democrats said the provision was specifically designed to prevent companies from taking any measures that would result in U.S. manufacturing jobs moving overseas.
But the presentation overseas markets better profit opportunities for automakers these days, the Democrats’ political objective of preserving jobs, and in general in order to rescue the legislation - to return to the automakers to profitability - would could be in conflict with companies discouraged from seeking the most profitable markets.
Parliament approved the self-bailout measure also would give judges a federal cost-of-living increases and would offer federal guarantees for financial transactions that some major transit agencies are in danger of defaulting on in part because of the credit crisis.
