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17 March 2025
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White House, Congress on brink of auto deal

US automakers have announced a drop in sales for 13 consecutive months with General Motors Corp, maker of Chevrolet, leading the pack. A $15-billion bailout package is expected to resuscitate the beleaguered industry. (AFP)

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By AP
Weary Democratic congressional leaders and White House officials agreed in principle on Tuesday on a $15 billion (Dh55.2 billion) bailout of US automakers that would give the government extraordinary power to restructure the floundering industry. But the rescue faced snags as Republican lawmakers raised deep concerns.

Congressional aides and a senior administration official said the proposed deal would speed the loans to Detroit’s struggling car companies and place a “car czar” named by President George W Bush in charge of overhauling the auto industry. Congress could vote on the plan as early as Wednesday and the money could be disbursed within days.

A breakthrough came when negotiators reached a compromise to require the czar to revoke the loans and deny any further federal aid to automakers that do not strike a deal with labor unions, creditors and others to ensure their survival by next spring – essentially pushing them into bankruptcy.

“A great deal of progress has been made on auto legislation that will protect the taxpayer and ensure that short-term financing is available only to companies prepared to undertake the dramatic restructuring necessary to become viable and competitive,” Dana Perino, the White House press secretary, said late Tuesday.

Still, staff aides worked into the night fine-tuning legislative details of the agreement. It could face substantial obstacles from congressional Republicans, who remained skeptical of the White House-negotiated plan. A group of conservatives led by Sen John Ensign of Nevada has threatened to block the measure.

A further stumbling block was Democrats’ refusal to scrap language, vehemently opposed by the White House that would force the carmakers to drop lawsuits challenging tough emissions limits in California and other states.

That measure “kills the deal,” said Dan Meyer, Bush’s top lobbyist.

Senior Democratic aides acknowledged as much on Tuesday and said they expected the provision to ultimately be dropped.