Congress rejects $25 billion plan

A rescue package for America's top three car makers has been rejected by the US Congress.

A line has been drawn under the $25 billion bailout for the car industry, desperately sought by Detroit's carmakers, as Democrats said they would not consider it until the companies produced a convincing plan for rebuilding their industry.

The fate of General Motors, Ford and Chrysler, sent the stock market plummeting, with the Dow Jones industrials dropping 445 points to hit its lowest point for six years.

Failure of any of the car makers would lead to a million or more job cuts, at a time when America has already reported claims for jobless aid reaching a 16-year high, and the number of Americans searching for work has soared past 10 million.

Democratic leaders scrapped votes on the car rescue, postponing it until next month.

House Speaker Nancy Pelosi said: "Until they show us the plan, we cannot show them the money."

GM, Ford and Chrysler issued statements promising to submit the blueprint the Democrats demanded showing they could use the funds to transform their struggling industry.

Copyright © Press Association 2008