"This is not the time to let these companies go bankrupt," Domenici told ABC News. "We would just be compounding our economic problems."
Reid held talks with Corker Thursday on crafting a new compromise. Corker, who has been steadfastly opposed to the bill drafted by congressional Democrats and the White House, has a lot of credibility among Republicans on the issue.
"I am at the negotiating table," Corker told ABC News at one point Thursday. "We are working on a great solution, and I think there is a great possibility that we can make it work."
But as staffers in the bipartisan negotiations worked to hash out the new auto bailout language, Corker called a late-night Republican conference meeting to pitch the as-yet unwritten and as-yet-unagreed-to plan.
Republicans seen going into the meeting included auto bailout supporters, like Sen. George Voinovich of Ohio, those on the fence like Domenici, and those opposed to a bailout, including Sen. Tom Coburn, R-Okla.
This afternoon, several Senate Democrats confirmed that negotiations were under way on the new compromise, and said the talks were a serious, late-in-the-game effort to get a deal that would have enough votes to pass the Senate.
If the Senate had changed the legislation, the House, which adjourned Wednesday night, would have been called back into session to reconcile the differences.
Speaker of the House Nancy Pelosi was reluctant to call the House back to start over again.
"The House passed bipartisan, compromise legislation that protects taxpayers, does not weaken environmental standards and places tough accountability measures on the industry to help ensure their long term viability and competitiveness," said Pelosi spokesman Nadeam Elshami. "The Senate should take up this legislation, which was negotiated in good faith and has the best prospects for enactment, and the House has no plans to return at this time."
The Corker-proposed compromise would have required the auto companies to reduce company debt by two-thirds and to negotiate a new labor deal that would make labor costs for the American automobile companies -- wages, benefits and pension plan expenditures -- the same as labor costs for foreign companies that operate plants in the United States. Estimates are that U.S. workers cost about $70 per vehicle to the $45 that foreign workers cost.
This is already a goal of the Detroit companies, but they are trying to phase in cuts by 2011. Under Corker's proposal, Chrysler and GM would get $14 billion in loans up front, but would have to give the money back if the changes were not implemented by March 31.
In addition to meeting with Democratic leaders and Republicans, Corker also met today with United Auto Worker representatives and talked to executives at GM, Chrysler and Ford.
Earlier, McConnell announced on the Senate floor that he would oppose the earlier bipartisan auto rescue package backed by Democrats and the White House, and instead backed a proposal for a pre-packaged bankruptcy being pushed by Corker.
"A lot of struggling Americans are wondering where their bailout is," said McConnell, arguing that, at some point, the bailouts have to stop, and that the Wall Street bailout he supported was for the entire economy and not just one industry.
McConnell's announcement came at the same time that President-elect Barack Obama was speaking in Chicago, saying, "we cannot simply stand by and watch this industry collapse."