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Auto Industry Bailout Off

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The Associated Press

Published: November 21, 2008

WASHINGTON - The $25 billion rescue plan for the auto industry, desperately sought by Detroit's beleaguered Big Three, collapsed Thursday as Congress drew the line at one more bailout and Democrats said they wouldn't even consider it until the companies produced a convincing plan for rebuilding their once-mighty industry.

The demise of the rescue - at least for now - left uncertain the fate of General Motors Corp., Ford Motor Co. and Chrysler LLC, and sent Wall Street spiraling to its lowest level in years.

The carmakers have been clobbered by lackluster sales and choked credit, and are battling to stay afloat through year's end. Failure of one or more of the Big Three would be a severe further blow to the floundering economy - and to many Americans' view of the nation's industrial strength - and throw a million or more additional workers off the job.

But Democratic leaders scrapped votes on the auto rescue, postponing until next month a politically tricky decision on whether to approve yet another unpopular bailout at a time of economic peril, or risk being blamed for the implosion of an industry that employs millions and has broad reach into all aspects of the U.S. economy.

"Until they show us the plan, we cannot show them the money," Speaker Nancy Pelosi, D-Calif., said.

GM, Ford and Chrysler quickly issued statements promising to submit the blueprint the Democrats demanded.

Pelosi and Senate Majority Leader Harry Reid, D-Nev., said Congress might return to work in early December for a vote on aid to the carmakers, but only if they show Congress they could use the funds to transform their struggling industry into a viable one.

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