Bush Reviews Auto Finances Before Deciding on Writing Check
Federal bailout help could be much less than sought.
Dec. 13, 2008— -- Detroit's Big Three automakers have staked their last, best hopes for an industry-saving lifeline on President George W. Bush, and the White House has signaled they can expect a decision as soon as Monday.
"The White House has indicated that it will step up and use the authority that they have had all along," Sen. Debbie Stabenow, D-Mich., told ABC News.
With General Motors and Chrysler tilting toward bankruptcy, and Ford potentially not far behind, administration officials have been working through the weekend to get a handle on the companies' finances and work out a possible bridge loan of $5 billion to $15 billion. The money would likely come from the Federal Reserve or the $700 billion dollars already approved to rescue the financial industry.
Officials involved in the bailout said a final resolution was not expected this weekend but could come anytime thereafter.
The president had opposed using those funds, but ran out of options this week when the bailout on Capitol Hill collapsed. Republican senators played to a public suffering bailout fatigue.
"Bailouts generally don't work and this is a huge proposed bailout and I fear it's just the down payment on more to come next year," warned Sen. Richard Shelby, R-Ala.
Shelby and other GOP senators ignored pleas from Bush to allow the bailout to be approved, in an unmistakable snub of a lame-duck president.
"This White House no longer has any clout on Capitol Hill," Stuart Rothenberg, editor of The Rothenberg Political Report, told ABC News. "Even Republicans have decided the Bush presidency is over."
A senior White House official told ABC News the administration is scrambling to avoid a disorderly bankruptcy. That does not rule out a so-called "orderly bankruptcy," in which the companies could use federal money to pay off debts after filing Chapter 11.
But Stabenow says the White House has indicated it has indeed ruled bankruptcy out.
"That is the way I read the conversation," Stabenow said. "The conversation I had was that they wouldn't let them collapse — and certainly bankruptcy would cause the collapse of the industry."
Canada Also Willing to Help With Detroit Bailout
"We will do whatever we need to do to ensure that our industry survives," Ron Gettelfinger, president of the United Auto Workers union, told ABC News. "That means we're ready to go back to the bargaining table with all of the stakeholders."
The bailout amount is likely to be closer to $5 billion than $15 billion, administration observers say.
"From the White House's point of view, this is keeping those companies solvent for a matter of weeks, not a matter of months, until the Obama administration takes over," Rothenberg told ABC News.
The bailout would trigger an added bonus for the Big Three from north of the border. Canada and the province of Ontario have agreed to chip in an extra 20 percent to any bailout approved by the White House.
Canada's Federal Industry Minister Tony Clement said Canada is prepared to provide help because the auto industry in Ontario, which is across the border from Detroit, employes hundreds of thousands of jobs that are directly or indirectly related to the U.S. car companies.