The failed bill means President Bush and the Treasury Department can provide the only possible salvation for GM, Chrysler and Ford, possibly by redirecting funds from the enormous $300bn budget already earmarked to rescue US financial institutions.
Yesterday before the Senate vote, the Bush White House made clear its view on the possible collapse of the auto industry. Responding to US jobless figures that last week reached their highest level since 1982, a White House press said: “The economy is in such a weakened state that adding another possible million jobs is something our economy cannot sustain at the moment.”
After the vote, another White House spokesman described the result as ‘disappointing’, and said options would now be evaluated.
With share prices sliding in Asian markets and Europe as a result of the vote, pundits in the US say an early response from the White House is required to prevent carnage when Wall Street opens later today.
The rescue package failed because the Big Three’s labour unions failed to agree to Republican demands for a swift move to pay parity with workers at foreign-owned car plants in the US.
Chrysler and GM both say they need immediate access to bailout funds to keep the lights on in the New Year, although Ford is a little better placed to weather the storm. The company has attempted to distance itself from the crisis saying it will only need access to taxpayer $billions if one of the other US makers fails.