US Congress approves $15-billion band-aid to automakers

08 December 2008

After months of pleading and haggling with US lawmakers for aid to prevent going bankrupt, the Big 3 automakers finally see some signs of hope.

Not wanting to add to November's record 533,000 job losses, the US Congress has agreed to grant a short-term $15-billion loan to keep GM and Chrysler afloat, till President-elect Barack Obama takes office.

Faced with US data of more than 533,000 jobs lost in November (See: Over half a million Americans lose jobs in November), the highest monthly job loss in 34 years,  taking the total jobs lost in 2008 so far to 1.9 million, the US Congress shuddered at the prospect of furher job losses by agrereing to release funds for the three auto makers who, according to reports, may not survive even if the $34 billion aid is given to them (See: American auto: let the Big Three perish?).

According to industry sources, Democrats and the White House have agreed in principle to give provisional support to the automakers after speaker Nancy Pelosi dropped a key point for funding the automakers from the $25 billion fund kept for re-tooling their factories to build green cars over the next several years.

Pelosi had resisted bailing out the automakers from the $25-billion fund kept from the fuel-efficiency programme.

She said in a statement on Saturday, "We hope to continue to make progress toward assistance for the automakers based on important principles -- that taxpayer assistance only be considered for companies willing to make the difficult decisions across the scope of their businesses to be viable and competitive in the future; that taxpayer assistance should come from funds already appropriated in the programme specifically intended to assist automakers -- the auto loan programme; and that assistance is accompanied by very strong taxpayer protections,."