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The Bush administration moved Friday (Dec. 12) to jump-start a rescue package for U.S. automakers, signaling that it will step in to prop up the beleaguered industry hours after what would have been a $14 billion loan program died amid acrimony in the Senate.
CBS MarketWatch reported that the Treasury Department said that it stands ready to make available funds to automakers until Congress has time to consider a long-term rescue package next year.
“Because Congress failed to act, we will stand ready to prevent an imminent failure until Congress reconvenes and acts to address the long-term viability of the industry,” said Treasury spokeswoman Brookly McLaughlin in a statement.
Separately, White House spokeswoman Dana Perino said funds to aid the sector might come from the government’s $700 billion Troubled Asset Relief Program.
The money would be a critical lifeline for General Motors Corp. and Chrysler LLC, both of which have said they need the cash by the end of the year to stay in business. Ford Motor Co. has said it only needs long-term financing.
Sen. Bob Corker, R-Tenn., urged Treasury Secretary Henry Paulson to attach tough conditions to any aid granted the auto companies. Corker authored an alternative plan debated in the Senate on Thursday that provided for shrinking the companies’ debts and bringing blue-collar workers’ wages into line with their counterparts at Japanese and European automakers.
“Without the conditions, it would be throwing good money after bad,” Corker said.
Separately, the president of the United Auto Workers urged Paulson to throw the companies a lifeline, seeking to prevent what he warned would be an “imminent collapse” of the industry.
“The auto industry around the world is in peril,” union chief Ron Gettelfinger said at a press conference, adding that the UAW has already made “enormous concessions” but that it’s willing to make more. He reiterated the UAW’s position that bankruptcy would only lead to liquidations.