US auto bailout programme rejected

A $14 billion (£9bn) bail-out for the US motor industry has fallen through after unions refused to accept demands for wage cuts. The deal foundered after bipartisan talks broke down over Republican demands that the United Auto Workers union took steep wage cuts to bring their pay into line with Japanese carmakers. Majority Leader Harry Reid, a Democrat, said he hoped US President George W Bush would tap into the £700 billion (£468bn) Wall Street bail-out fund for emergency aid to assist the car manufacturers. General Motors and Chrysler say they are now just weeks from potential collapse. Ford said it no longer needed federal help but that its survival is far from certain. GM said it is "deeply disappointed" that the bipartisan agreement failed. The White House said it was evaluating its options in light of the breakdown. "It's disappointing that Congress failed to act," a White House statement said. The Senate rejected the bail-out 52-35 on a procedural vote, well short of the 60 required - after the talks fell apart. Democratic House Speaker Nancy Pelosi called Senate Republicans' refusal to support the White House-negotiated bill irresponsible and also urged the Bush administration and the Federal Reserve to provide short-term relief for the industry.

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ITN | December 12, 2008

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