Democratic congressional leaders have demanded executives at US car makers provide a business survival plan in exchange for their support of up to $25 billion in loans.
House of Representatives Speaker Nancy Pelosi, a California Democrat, and Senate Majority Leader Harry Reid, a Nevada Democrat, told a news conference the automakers must develop a bailout proposal by December 2nd and it would be considered during the week of December 8th.
"Until we can see a plan where the auto industry is held accountable and a plan for viability on how they go into the future . . . we cannot show them the money," Ms Pelosi said.
The ultimatum came yesterday after the Democratic leaders failed to persuade the White House and congressional Republicans to use part of a $700 billion financial rescue fund to prop up the sector.
Hanging in the balance is the future of General Motors, Ford and Chrysler, whose losses have mounted during a severe economic downturn that has prompted Americans to largely stop buying cars.
Shares of GM and Ford rebounded from multi-decade lows as the developments in Washington kept bailout hopes alive.
While many legislators are anxious to see the companies survive, Republicans have been more wary of whether the money would really help, and Democrats have been more inclined to be generous to the huge employers of unionised labour.
Democratic leaders acknowledged on Thursday a growing public resentment over government bailouts of US business in slowing the automakers' demands, saying they will take a look after the auto industry provides a road map to its survival.
Reuters