Although the Bush administration and the US congress approved to the $15 billion bailout plan for the American auto industry, they still needed the approval of the US Senate. Because they're the people in-charge with the loan money.
However last evening, the US Senate voted to reject a $14 billion bailout of the U.S. auto industry. According to many reports, General Motors has got bankruptcy and restructuring advisers in preparation for the bad news and Chrysler has already retained CH11 counsel. So hopes of the GM and Chrysler survival have nearly dashed, so both of which may run out of cash by the end of the year. To quote Senate Majority Leader Harry Reid, this will be "a very, very bad Christmas" for many Americans.
Over the past day, Senators have tried to resolve the House-approved bill so it could pass Senate Republican muster, but reports suggest that the United Auto Workers was unwilling to accept GOP demands that workers agree to parity in pay and benefits.
Countless economists and industry analysts are warning that if any one of the Detroit 3 goes under, it will spell disaster for an economy already suffering in a recession. So some industry analysts suggest options including a repeat vote when Congress comes back early next year with new legislation, or the Bush administration could choose to use some of the $700 billion rescue package earmarked for financial markets. The U.S. Federal Reserve also has special authority to make emergency loans to almost any economically important entity that can't get credit elsewhere.
There's still hope, Detroit.
Watch the video of the Senate vote.