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Us Bail-out Stymied For Big Three Car Makers

The Age

Friday November 21, 2008

Anne Davies

AMERICAN politicians have told the big three car makers - General Motors, Ford and Chrysler - that if they want $US25billion ($A38.6billion) in emergency loans, they must agree to concentrate on building up US jobs, and there will be limits on overseas investment.

The move could have a serious effect on plants around the world, including in Australia as retooling, new models or moves to fuel-efficiency would be unlikely to receive financial support from US headquarters.

Australia has already offered the local subsidiaries $A6 billion, and Germany has offered ?500 million to General Motors offshoot Opel amid calls for a co-ordinated international effort to prop up the multinationals.

But as of yesterday , negotiations for a quick bail-out from US politicians appeared doomed. The Republicans voted against a motion to debate in the Senate the Democrats' bill to provide the funds out of the $US700 billion Wall Street bail-out fund, called the Troubled Assets Relief program.

A Republican push to divert $US25 billion out of money already allocated to help with retooling to make fuel efficient cars was stymied by Democrats.

Negotiations were continuing, but there is little prospect of the US car makers receiving help until January when the Democrats strengthen numbers in both houses.

© 2008 The Age

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