Washington With Congress gridlocked and the economy floundering, the Bush administration declared Friday it would step in to prevent the “precipitous collapse” of the U.S. auto industry and the disastrous loss of hundreds of thousands of jobs sure to follow.
A day after the sudden demise of rescue legislation in Congress, General Motors officials were talking with the administration and the Federal Reserve about how carmakers could still get the billions of dollars they say they need to survive. The talks included conditions that automakers would have to meet, said GM spokesman Greg Martin.
The administration said no decisions had been made on the size or duration of the new bailout plan, or what type of concessions might be demanded from the struggling automakers, their workers, stockholders or others.
In a reversal, the most likely rescue option under consideration involved billions of dollars originally ticketed for the bailout of the financial industry. President George W. Bush had long declared that money off-limits to the beleaguered automakers.
General Motors Corp. and Chrysler LLC have warned they are running out of cash and face bankruptcy. Ford Motor Co., which is in somewhat better shape financially, has been seeking access to a line of credit.