Congress to vote on car bail-out

The US House of Representatives could vote on a $15bn (£10bn) bail-out of the US car industry as soon as Wednesday.

The White House and leading Congressional Democrats have reached broad agreement on the rescue package for the "Big Three" US car firms.

Administration officials say the tentative agreement covers key points but details still need clarification.

While the House may schedule a vote on Wednesday, the measure could be held up for longer in the Senate.

While the Democrats have a comfortable majority in the House of Representatives, they only having a majority of one in the current lame-duck Senate, so the bill may struggle to get through without extensive amendment.

"We want to complete this as soon as possible," said Harry Reid, Democratic majority leader in the Senate.

"The American people want us to make a decision."

'Car Tsar'

General Motors and Chrysler say they risk ruin without immediate aid, while Ford says it may need funds in the future.

President George W Bush is said to want strict conditions attached to any agreement to bail out the firms, including tough oversight for the three carmakers to ensure that the money is accompanied by sound financial recovery plans.

This follows criticism that the $700bn bail-out of the financial sector was insufficiently detailed.

Under the proposal, the government is expected to take non-voting shares in General Motors, Ford and Chrysler.

The government is also expected to appoint of a "Car Tsar" to oversee the use of the money.

The three firms had been calling for $34bn between them, and their bosses recently went before Congress to put their case.

'Disappointed'

GM, Ford and Chrysler have all seen sales fall sharply this year in their home market.

While this decline reflects an industry-wide fall that has also hit European and Japanese carmakers in the US, the Big Three have also been criticised for not offering an attractive range of vehicles.

They have been said to be too slow in responding to the growing popularity of smaller, more fuel-efficient vehicles.

GM admitted on Monday that it had "disappointed" American consumers by letting "our quality fall below industry standards and our designs became lacklustre".

(Published by BBC News- December 10, 2008)