The auto bailout deal could face a dead end in the US Senate
The ball is in the US Senate with respect to the fate of the multi-billion loan package for two of the three struggling Detroit-based auto makers. Earlier this week the House of Representatives already approved their own version of the bailout package that would make US$14 billion of taxpayers’ money available for General Motors and Chrysler.
The plan, which still needs Senate approval, was greeted with pessimism by a number of Senate Republicans. They argued that until the auto makers restructure many of their contracts especially with the auto workers’ union, the federal government would just be wasting taxpayer’s money into something that is doomed for failure anyway.
Latest reports, however, show that the Senate Democrats’ efforts to strike a compromise with their GOP counterparts in order the achieve the needed votes to get the loan package passed, is facing a huge stumbling block. Public perception against the bailout has been mounting according to the latest poll conducted by CNN/Opinion Research Poll Corp., showing 60 percent of Americans do not agree with the idea of using public funds to help the auto makers.
The outgoing White House administration as well as the soon to be sworn-in President-elect Barack Obama have stood for a bailout plan just to keep the ‘Detroit 3′ from filing Chapter 11 or bankruptcy. With the talks in the Senate due to collapse a likely scenario, the auto makers are left with no choice but to consider the bankruptcy route. Just this morning, Fox News reported that the Wall Street Journal is running a story about General Motors officials in the process of hiring lawyers and advisers with expertise in bankruptcy laws. Reality has set in for the ‘Detroit 3′ and it looks like their engines are bound for a bumpy ride in the coming weeks.
Nathan Andrada
nathanandrada.wordpress.com
