WASHINGTON - There'll be no bailout for the Big Three from Congress. The deal died in the Senate overnight after an argument over wage cuts for autoworkers. Now Detroit is looking for help from The White House.
Chrysler, General Motors and Ford are reeling after the Senate voted 52-35 to reject a $14 billion bailout package that would have extended the collapsing companies a lifeline.
Talks fell apart after the United Auto Workers rejected a Republican demand that they accept wage cuts before their current contract with the automakers runs out in 2011. The cuts would have brought UAW workers' salaries in line with those employed by Japanese carmakers in the U.S.
"We have solved everything substantively and about three words keep us from reaching conclusion tonight," said Congressman Bob Corker (R-TN).
"We will leave here tonight and go home for the holiday recesses, but for the literally hundreds of thousands of people whose jobs depend upon this industry, this will not be a joyous season," Sen. Chris Dodd (D-CT) said.
The breakdown may have been the final act for U.S. automakers. Congress won't be back in session until early January. And both Chrysler and General Motors have suggested they could go bankrupt before then.
So What's Left?
"People played Russian roulette with this recession tonight," Sen. Barbara Boxer (D-CA) charged. "We don't know what's going to happen. But we do know that Hank Paulson can save these jobs."
Supporters of the bailout are now looking to Plan B: as in the Bush administration. They want President George W. Bush to take money from the $700 billion Wall Street bailout and lend it to the automakers.
White House officials have said the already struggling economy would be weakened even further if the auto industry goes under. President-elect Barack Obama wants action as well.
"We cannot simply stand by and watch this industry collapse," Obama insisted.
Markets Reeling On Bailout News
World markets plummeted amid news of the deal's collapse in the Senate, again fueling fears of a deep worldwide recession. Oil fell to $46 a barrel, and the dollar sank to a 13-year low against the yen, as analysts anticipate big selloffs on Wall Street today.
Recent news that the U.S. lost more than a half-million jobs in November - the most in any month in over 30 years - has added to lawmakers' sense of urgency to save the Big Three. But right now, it looks like they have a very tough road to travel.