The $14 billion auto aid rejected by the Senate |

Last week, the US House approved a $14 billion emergency aid for General Motors and Chrysler, the two Detroit companies who are facing serious financial problems. However, yesterday, the Senate rejected the bill, leaving the two giants very close to a collapse. While Ford only asked for a $9 billion “standby” line of credit in case the crisis gets worse, GM said it needs $4 billion in December and $4 billion in January in order to survive, and Chrysler needs $7 billion to make it through March 31.

Of course, there’s a lot of contreversy around this bailout, and while we heard a lot of people saying that the Big Three don’t deserve this aid if they weren’t able to cover their costs, but these people are forgetting is that there are millions of employees who will get affected by an eventual collapse of these companies. “I dread looking at Wall Street tomorrow,” Senate Majority Leader Harry Reid, D-Nev. said after the talks collapsed. “It’s not going to be a pleasant sight. This is going to be a very bad Christmas for many people.”

However, all hope is not lost for the Detroit giants, because auto lobbyists said that the Bush administration may seek to tie funding of automakers to winning approval from Congress to spend the next $350 billion (the $700 billion bailout was split into two $350 billion rounds of funding).

Source: The Detroit News

Post tags : bailout, Chrysler, Ford, General Motors, gm, senate