The prospect of a bailout for the US’s ailing auto industry appears increasingly in doubt.
The Bush administration has made clear it opposes a proposal by congressional Democrats to tap into the Wall Street rescue fund. Treasury Secretary Henry Paulson has said he prefers to keep the money in reserve for unforeseen emergencies and to preserve flexibility for the next administration. And in a further set-back for the car-making industry on Monday, Democrats and Republicans failed to agree on a separate 20 billion euro package. As sales plummet to a 17-year low, auto chiefs will be making their case in Congress in the coming days in a bid to secure help. The US’s biggest carmaker, General Motors, which has announced losses of more than 3.3 billion euros in the third quarter, has warned it may not have enough cash to get through the year. But Henry Paulson has made his position clear: “The auto industry is an important industry and I don’t think it would be good to see a failure of an auto company in this period, this tough period we’re going through right now. But again I feel very stongly that anything we do has got to be a path to sustainability and viability,” he said. While shoring up the embattled auto industry is top of the agenda for Barack Obama’s transition team, the president-elect has made clear any bailout for car-makers would be subject to stiff conditions.