As the country’s automakers continue to bleed cash led by General Motors’ and Ford’s staggering quarterly losses, leaders of the US Congress are calling for government assistance to prevent the US auto industry from going under. They called on the Bush administration to provide assistance to the automakers as part of the Treasury Department’s $700 billion emergency rescue program.
Analysts have warned that unless the government intervenes, General Motors could face bankruptcy which means the loss of livelihood for 100,000 North Americans as well as hundreds of thousands more for others whose jobs are closely tied to the automotive industry. House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid have asked Treasury Secretary Henry M. Paulson to “review the feasibility . . . of providing temporary assistance to the automobile industry during the current financial crisis.”
Pelosi and Reid’s letter notes that Congress granted Paulson broad discretion to use the bailout money to “restore financial market stability. A healthy automobile manufacturing sector is essential to the restoration of financial market security,” the letter continues, as well as to “the overall health of our economy, and the livelihood of the automobile sector’s workforce.”
So far, the Treasury has declined to provide assistance to the automakers but lawmakers from both parties, as well as Michigan officials, auto industry executives and labor leaders have stepped up their campaign for federal aid. GM, Ford and Chrysler are looking for up to $25 billion in emergency loans to prevent the collapse of the automotive industry.