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White House reviews Dem auto bailout but no deal yet

Business Materials 9 December 2008 06:02 (UTC +04:00)

The White House reviewed a Democratic plan on Monday to bail out stricken automakers with up to $15 billion (10.1 billion pounds) in loans, a bid that would also clear the way for longer-term help if industry meets certain conditions, Reuters reported.

The rescue aims to avert the threatened collapse of General Motors Corp and Chrysler LLC, saving more than 350,000 industry jobs and, according to the companies, employment for millions of others as the U.S. struggles with recession.

"This is no blank check or blank hope," Senate Majority Leader Harry Reid said as he reconvened the chamber to consider a measure later in the week.

The White House withheld immediate approval, registering initial concern that the effort was not tough enough. Democratic leaders said they were working to address the issues and remained confident the measure would move forward soon.

Senior Democratic and Republican aides believe the bailout will pass Congress.

GM, Ford and Chrysler submitted business-plan information to Congress on their plans last week with a $34 billion bailout request.

The Bush administration hopes for a deal but insists on strict conditions that companies receiving money be commercially viable.

"I believe that viability means that all aspects of the companies need to be re-examined to make sure that they can survive in the long term," President George W Bush said in an interview with ABC News' "Nightline," which released excerpts.

Both GM and Chrysler have requested billions by month's end to boost their dwindling cash reserves. Ford Motor Co is requesting a line of credit that would not be tapped unless its finances deteriorate further than expected in 2009.

Wall Street responded positively, with the Dow Jones industrials closing up 298 points partly on auto-package developments. Ford stock was up 24 percent to $3.38, while GM was 20 percent higher to $4.93.

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