The United States Congress could act on a deal to help America’s failing car industry by the end of the day, the Senate majority leader said today.
Harry Reid said a final agreement with the White House on a bail-out package for Detroit’s Big Three rested on a couple of outstanding issues and could be finished by late tonight or tomorrow.
General Motors (GM), Chrysler and Ford have tried to convince members of the US Congress to vote on the car industry bail-out after both GM and Chrysler said they would struggle to survive beyond the end of the month without it.
The size of the package has not been finalised, but it is expected to be about $15bn (€11.58bn). The three top executives asked for $34bn (€26.2bn).
White House press secretary Dana Perino said: “I think overall we’re headed in the right direction.”
She said the long-term viability of the companies was still a sticking point.
“There will not be long-term financing if they can’t prove long-term viability,” Ms Perino told reporters aboard Air Force One as President George Bush headed to West Point, New York, for a speech.
But she said the White House and Congress had made a lot of progress.
“We’re working fast. but we’re also wanting to get it right,” she said.
“I don’t know if we’ll have something finalised today. It’s possible.”
The fast-paced developments come amid an environment of general economic instability, the Congress and the presidency both in transition, a ricocheting Wall Street and the Federal Reserve Board, Treasury and other agencies fighting to steady the reeling financial industry.
Congressional aides continued intense closed-door talks to resolve remaining disputes on the plan, which would provide the loans and place a presidentially-named “car czar” in charge of overseeing a broad restructuring of the car industry.
The emerging bail-out plan would draw emergency aid from an existing loan programme meant to help the carmakers build fuel-efficient vehicles, a congressional aide said.
In return for the money, the carmakers would have to agree to terms similar to those placed on banks that receive funds under the $700bn (€540.9bn) rescue package earlier this year.
These included limits on their top executives’ pay packages; the end of paying dividends; giving the government a chunk of future gains; and a guarantee that taxpayers would be reimbursed before any other shareholders.
They would also have to give up their corporate jets after they prompted a public relations disaster by using them to travel to the first Congressional hearings on the bail-out last month.