Washington DC: A White House-backed $14 billion bailout initiative for ailing US auto majors collapsed in the Senate Thursday night, bringing at least one of them, General Motors Corp, closer to bankruptcy unless thrown a lifeline by the Treasury Department. This possibility is also considered to be slim with Treasury secretary Henry Paulson refusing to consider the option in the near past. (See: Auto bail-out passes House vote; Republicans pledge Senate veto)

The motion tallied 52-35 in favour, which was well short of the 60 needed to prevent debate and set filibustering into motion.

"We're not going to get to the finish line," said Majority Leader Harry Reid "I dread looking at Wall Street tomorrow (Friday). It's not going to be a pleasant sight."

Under the time honoured traditions of filibuster, lawmakers moving against a proposal may take up as much time as they want discussing it thereby ensuring that the proposal never gets voted upon.

Now legislative action may be expected only from a new Congress which will convene in January.

Democrats and the United Auto Workers union made a last ditch effort to win Republican support for the $14 billion loan package but failed when the UAW refused to accept wage cuts by a 'date certain' in 2009. This would have put its members at par with workers at US auto plants owned by foreign competitors like Toyota and Honda.

Union workers at US automakers make about $3-4 per hour more than the non-union US employees of foreign automakers like Toyota and Honda, according to the Center for Automotive Research.

The 'date certain' was pivotal to a industry restructuring proposal by Sen Bob Corker (R-Tenn.) which sought to stiffen the terms set in the administration's bill, which received House approval on Wednesday night. The proposal would have allowed the industry to restructure itself by 31 March 2009.

Sen Corker's proposals sought large concessions from bondholders, which would have reduced debt levels on GM. But ultimately the concessions he sought from the labour unions proved to be the toughest to crack. Though the UAW gave ground on several fronts, it resisted the 'date certain' demand as being political.

Most of the foreign automaker plants in the US are located in the deeply Republican South.

Democrats had been pressing the White House from the beginning to help Detroit by tapping funds from the $700 billion package intended for the financial sector, a request which the White House refused to consider.

The White House finally negotiated a deal with Democrats under which Detroit would get a short-term loan with strings attached, including appointment of a so-called "car czar" whi would oversee the drawing up of restructuring plans by the companies.

This was not acceptable to most Senate Republicans who found the plan too weak and not focused enough in working towards long-term viability for the US auto industry.