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The bosses of the ‘Big Three’ US car makers yesterday returned to Detroit empty-handed as Congress put bail-out plans on hold.
A bipartisan group of senators, including Michigan's Carl Levin, put forward a plan earlier in the day to allow the retargeting of the $25bn ‘green’ package intended for factory modernisation.
But the proposal was knocked back by speaker Nancy Pelosi and Senate majority leader Harry Reid, who said: "no one has come up with a plan that can pass the House and the Senate and be signed by the president."
Congress has now been adjourned until 2 December, when the car makers will have to explain to US politicians how they intend to use any bail-out cash.
“Unless they can show us the plan, we can’t show them the money,” Pelosi said yesterday.
Since approving the $700bn funding to allow the financial system to collect together its toxic assets, the US government has come under increasing criticism for allowing the money to be redirected towards recapitalisation, a role that some believe could have been performed by the private sector.
By sending the car makers back to Detroit to assemble clearer plans for the use and repayment of any loan, Congress has shown it is not going to make the same mistake twice.
Ed Keohane
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