Wait and worry for US autoworkers as White House weighs options
AFP - Sunday, December 14
WASHINGTON (AFP) - - Thousands of anxious autoworkers were awaiting word on whether the White House will take decisive action on an industry bailout, as a presidential spokesman said that no decision had been made yet.
"We'll be focused on trying to get the policy right while considering the best interests of the taxpayer and our economy, and we'll take the time we have available to do that right," said spokesman Tony Fratto.
"No decisions have been made," he said, adding that administration officials were assessing the automakers' financial data.
"We'll take a look at that information, make some judgments and review our options," Fratto said.
After a short-term loan package of 14 billion dollars in government funds failed to pass the Senate this week, the administration of President George W. Bush signaled it would consider tapping the massive 700-billion-dollar bailout for financial services to help the carmakers.
And the US Treasury Department "will stand ready to prevent an imminent failure until Congress reconvenes and acts to address the long-term viability of the industry," White House spokeswoman Brookly McLaughlin said Friday.
Lawmakers are due back January 6.
Auto giant General Motors has pleaded for government help and warned it will run out of cash by the end of this month without intervention. Chrysler and Ford have also asked for federal aid to stay afloat.
GM has admitted to hiring legal and financial advisors to consider all options, including bankruptcy. On Friday it announced it was idling 30 percent of its North American production "in response to rapidly deteriorating market conditions."
"We're considering the full range of options with respect to the automakers, and we haven't indicated what we will do, except to note that disorderly bankruptcy is something we should try to avoid," a senior administration official said.
For months, Bush had refused to tap the 700-billion-dollar Troubled Asset Relief Program conceived to help financial services firms, to save US carmakers, but the failure in the Senate of alternative legislation bringing 14 billion dollars in bridge loans forced his hand.
The measure would have required the manufacturing giants to engage in painful restructuring to ensure their long-term survival and repayment of the government monies or face bankruptcy proceedings.
The House of Representatives passed the bill on Wednesday, but it collapsed the following day in the Senate on strident opposition from Republicans who blamed unions in a dispute on the timing of bringing their wages in line with those paid by foreign automakers to non-unionized workers in US states.
Democratic Senate Majority Leader Harry Reid said he was "encouraged" by the Bush administration's announcements and "appreciative of the administration's change of heart" on his longstanding push to use TARP funds.
United Automobile Workers union President Ron Gettelfinger welcomed the White House and Treasury announcements as "great news" but worried about the details and pleaded for the funds to come "as quickly as possible."
US president-elect Barack Obama, who takes office January 20, urged the White House and the Congress to "find a way" to provide urgent aid while forcing "the long-term restructuring that is absolutely required."
Canada's government promised to aid its portion of the Big Three auto sector, as soon as its southern neighbor decided on its own package.
"This support will be at an amount that would be approximately proportional to our share of the Detroit three production in North America," Industry Minister Tony Clement said.
The Canadian aid would amount to 2.8 billion US dollars, or some 20 percent of the 14-billion-dollar figure being discussed in the United States.
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The entrance to a Ford car plant. Thousands of anxious autoworkers were awaiting word on whether the White House will take decisive action on an industry bailout, as a presidential spokesman said that no decision had been made yet.
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