Friday December 12, 2008
Navivest

After sailing through the democrat controlled House of Representatives a couple days ago, the $14 billion auto industry bailout bill, which was supposed to throw a lifeline to Detroit automakers who are now on their last leg, failed to even come up for a vote in the Senate.

Those supporting the bill could not muster up the 60 votes required to end a debate on whether to bring the bill to a vote, instead only managing to garner 52 votes to 35 against.

The bill reportedly failed, because the United Auto Workers union refused to concede to a plan to cut the pay of Detroit autoworkers so that their pay is on parity with what non-unionized workers at the U.S. plants of Japanese autoworkers are making.

With the failure of the bill, there is a chance that General Motors (GM) and Chrysler, could file for bankruptcy in the coming days ahead.

However, all is not entirely lost. The Whitehouse has the option of redirecting some funds from the $700 billion Troubled Asset Relief Program to the automakers and will most likely do so, in a bid to stave of bankruptcy filings. It had forewarned reluctant republican Senate members that it would pursue this option if congress could not pass the bill.

After the failure of the bill to reach a vote Thursday night, Whitehouse spokesperson Tony Fratto stated that the Whitehouse will “evaluate our options in light of the breakdown in Congress.”

Tags: Auto Bailout  GM  Chrysler  TARP  Stocks  Stock Market