Car industry bail-out under threat

The Republican Party is threatening to upset a $14 billion (£9bn) rescue package for the US car industry when proposals go to the Senate.

After the emergency bail-out plan was passed by the House of Representatives on Wednesday night, Democrats and the Bush White House hoped for a Senate vote as early as Thursday and enactment by the end of the week.

They argued the cash was needed to stave off disaster for the car industry and prevent the loss of at least three million jobs - an event which would be disastrous for the already reeling economy.

The plan, approved 237-170 by the House, would provide money within days to cash-starved General Motors and Chrysler. Ford, which has said it has enough to stay afloat, would also be eligible for government aid.

But a Senate rebellion is now brewing among Republicans, who are prepared to not only take on the Democrats but also stand in open revolt against their party's lame-duck president.

The Republicans want to force the companies into bankruptcy or mandate hefty concessions from car workers and creditors as a condition of any aid. They also oppose an environmental mandate that House Democrats insisted on including in the measure.

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