The Detroit 3 - Ford, General Motors (Vauxhall) and Chrysler, have been told to provide a survival plan in exchange for up to $25 billion in loans.
The ultimatum came on Thursday after Democratic leaders failed to persuade the White House and congressional Republicans to use part of a $700 billion financial rescue fund to prop up the auto industry.
House of Representatives Speaker Nancy Pelosi, a California Democrat, and Senate Majority Leader Harry Reid, a Nevada Democrat, told a news conference that the "Detroit 3" must develop a bailout proposal by December the 2nd and it would be considered during the week of Decemeber the 8th.
"Until we can see a plan where the auto industry is held accountable and a plan for viability on how they go into the future... we cannot show them the money," Pelosi said.
Said Reid: "We can only help if they (the car makers) are willing to help themselves."
The requirement of a survival plan seems to have been in response to growing public resentment over the bailout package.
This leaves the future of General Motors, who are best known in the UK for the Vauxhall brand, Ford Motor and Chrysler LLC hanging in the balance. Their losses have mounted during a severe economic downturn that has prompted Americans to largely stop buying cars, as people can't get the loans that they would normally use to buy them.
Shares of GM and Ford rebounded from multi-decade lows as the developments in Washington kept bailout hopes alive. While most of Washington is anxious to see the companies survive, Republicans have been more wary of whether the money would really help, and Democrats have been more inclined to be generous to the huge employers of unionized labor.
Both General Motors and Ford pledged to cooperate. It could be that the big 3 are saved by a proposed $25 billion energy department loan, which they could recieve in exchange for making greener cars.
This report was compiled by Justin Woodcock on behalf of Find-a-Part - Car Parts Search specialists since 1978.
