HANOI (Reuters) - The Bush administration should throw a lifeline to ailing American auto firms to tide them over until the new year but any aid must come with strict conditions, the chairman of the Senate Finance Committee said on Tuesday.
Key lawmakers and other sources have said the administration could act as early as Wednesday to approve an automaker bailout from its bank rescue fund, with conditions likely to reflect at least those approved by the U.S. House of Representatives last week.
“I think the administration should throw a lifeline,” Senator Max Baucus, a Montana Democrat, said in an interview during a visit to Vietnam.
“But (it should come) with very specific conditions to enable them to help tide them over until next year when they come back with a better business plan that will enable them to be more competitive and more durable and more lasting.”
The Senate failed last Thursday to pass a $14 billion bill to save Detroit’s Big Three that had earlier passed the House. The deal fell apart over proposed wage concessions by the United Auto Workers.
This year there was not much more Congress could do on the issue, and what happened next year depended on President-Elect Barack Obama, who takes office on January 20, Baucus said.
“A lot of this is in the hands of the new president. A lot of this depends on what ideas he has. Generally, everybody agrees: you shouldn’t let the auto industry go down the tubes but yet they made a lot of mistakes,” he said.
General Motors Corp and Chrysler LLC, which is owned by Cerberus Capital Management, have said they need immediate injections of cash to avoid near-term collapse.
Ford Motor Co is seeking a government line of credit to be used if its financial conditions deteriorate more than expected in 2009.
GM shares closed 3.6 percent higher at $4.08, while Ford closed up 4.6 percent at $3.18 on the New York Stock Exchange on Monday.
In Vietnam, Baucus said he would encourage the government to open the market to all beef imports from the United States and press for better enforcement of intellectual property rights, which are widely flaunted.
Baucus had planned a stop in China, but canceled due to the deliberations over the auto industry plan last week.
“The message to China was going to be: ‘Hey, as far as I’m concerned, and I think as far as the new administration is concerned, we’re just as engaged as we have been in the past.’”
Editing by Dean Yates
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