Senate kills carmakers' bailout bill


POSTED: Friday, December 12, 2008

WASHINGTON » A $14 billion emergency bailout for U.S. automakers collapsed in the Senate last night after the United Auto Workers refused to accede to Republican demands for swift wage cuts.

The collapse came after bipartisan talks on the auto rescue broke down over GOP demands that the UAW agree to steep pay reductions by 2009 to bring their wages into line with Japanese carmakers.

Majority Leader Harry Reid said he hoped President Bush would tap the $700 billion Wall Street bailout fund for emergency aid to the automakers. General Motors Corp. and Chrysler LLC have said they could be weeks from collapse. Ford Motor Co. says it does not need federal help now, but its survival is far from certain.

Reid called the bill's collapse “;a loss for the country.”;

The Senate rejected the bailout 52-35 on a procedural vote - well short of the 60 required - after the talks fell apart. Hawaii Democratic Sens. Daniel Akaka and Daniel Inouye both voted for the bill.

Hourly wages for UAW workers at GM factories are about equal to those paid by Toyota Motor Corp. at its older U.S. factories, according to the companies. GM says the average UAW laborer makes $29.78 per hour, while Toyota says it pays about $30 per hour. But the unionized factories have far higher benefit costs.