TIMESONLINE: The American car industry faced imminent collapse last night after the Senate effectively threw out a $14 billion emergency bailout bill.
Talks between the Democrats and Republicans over the viability of a federal-funded short-term rescue of General Motors and Chrysler fell apart late in the evening after the two sides of the political divide failed to agree on pay for workers at the auto companies.
Harry Reid, the Democrat Senate Majority Leader, yesterday said that Capitol Hill had thrown in the towel until Barack Obama, the President-elect, took office on January 20.
However, General Motors and Chrysler may not be able to wait until next month without seeking bankruptcy protection - a move which is expected to trigger the collapse of the entire American car-making industry. >>> Suzy Jagger in New York | December 12, 2008
THE GUARDIAN: World Markets Slump as US Car Industry Bail-out Fails
Stockmarkets tumbled around the world after a $14bn (£10bn) bail-out package for the struggling US car industry collapsed last night.
The London market followed Asian shares into the red. The FTSE 100 index fell nearly 180 points in early trading, a drop of 4%, and later traded down 166 points at 4221. Dow Jones futures were down more than 310 points, pointing to a fall on Wall Street when it opens later today. There could be more bad news for the US economy when official figures are released this afternoon, which are expected to show a sharp fall in retail sales in November.
Republicans in the US Senate refused to support a bill to help the carmakers, endorsed by the White House and congressional Democrats. Republican demands for union wage cuts derailed a last-ditch effort to push the emergency aid through before the end of the year. The breakdown left the car industry - which employs 3 million people - in limbo. General Motors and Chrysler have warned that they will go bankrupt this month if they do not receive $14bn in taxpayer funds.
The Senate majority leader, Harry Reid, called the breakdown a "a loss for the country". "It's over with," he said. "I dread looking at Wall Street tomorrow. It's not going to be a pleasant sight."
Watch Guardian video: 'I dread looking at Wall Street': Senators from both sides are gloomy after a bail-out proposal for the big three carmakers is rejected >>> Friday, 12 December 2008
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