US car industry bail-out vote delayed

A bail-out vote for the US car industry has been put off until next month, officials in Congress said today.

America’s top three car makers must first come up with a plan showing how any bail-out money would help transform their industry, Democrats said.

An announcement is expected later today in the Capitol, where top Democrats in the two houses of Congress – the House and Senate – were meeting.

The officials who described the developments did so on condition of anonymity, saying they were not authorised to disclose them.

The big car companies – General Motors, Ford and Chrysler – have been seeking government loans totalling $25bn to stay in business until spring.

United Auto Workers President Ron Gettelfinger urged Congress and the Bush administration to act immediately on loans for car makers, saying one or more of them could collapse by the end of the year without it.

Mr Gettelfinger was speaking at a Detroit news conference just as reports surfaced that a bipartisan group of car-state senators had reached a compromise on bailing out Chrysler, Ford and General Motors, but this did not garner wider support.

The union president called on Congress to vote on the loans today, but that appeared unlikely.

Nancy Pelosi, Democratic speaker of the House of Representatives, said at a news conference in the Capitol: "Until they show us the plan, we cannot show them the money.''

She and Senate Majority Leader Harry Reid, also a Democrat, said Congress would return to work early next month to vote on legislation if the “big three” car makers produce an acceptable plan.

The decision averted a likely defeat of legislation providing 25 billion dollar loans for the industry.

Mr Reid and Ms Pelosi both said there was no plan in circulation that could pass both chambers of Congress and win President George Bush’s approval.

While the decision headed off the defeat of one bill, it did not necessarily translate into passage of a different one.

As a result, the fate of hundreds of thousands of car workers and even the American industry hangs in the balance.

The chief executives of the “big three” appealed personally to politicians for the loans this week, and warned that their industry might collapse without them.

In testimony, they said their problem was that credit was unavailable and not that they were manufacturing products that consumers had turned their backs on.

Whatever support they found sagged when it became known that each of them had flown into Washington aboard multi-million dollar corporate jets. Mr Reid observed that was “difficult to explain” to taxpayers in his home town of Searchlight, Nevada.

The car makers are on a tight timeline. Mr Reid and Ms Pelosi said their plan must be turned over to senior politicians by December 2.

They said hearings were possible the first week of December, and Congress may return to session the following week to consider legislation.

Ms Pelosi stressed that whatever the big three provided to Congress, it must show they had a plan for “viability and accountability,” meaning that they were transforming their industry in a way that it would become competitive, and that they were clear about how the loan money was used.

Even if politicians should return to vote, they would be likely to insist on numerous conditions on any loans.

One possibility is to seek a partial ownership of the companies. Another is to limit salaries of top executives. A third is to prohibit use of the funds for any lobbying.