The US Senate refused to provide loans to the auto industry without the United Auto Workers making wage concessions.The vote in the US Senate was split on party lines, with the Republican senators voting against the bail out, and Democratic senators supporting the bail out.
It is still possible for the White House to intervene, but markets have already reacted.
In Asia markets dropped 7% on the news of the Senate decision.
Senate majority leader Harry Reid said, “I dread looking at Wall Street tomorrow. It’s not going to be a pleasant sight.”
The US government gave $700 billion to the financial services industry with very few questions or conditions, but the auto industry had to jump through hoops, make concessions and play political optics.
Three million Americans are employed in the auto industry, according to industry numbers.
In Canada government figures show almost 500 thousand Canadians are employed in the auto industry including manufacturing, distribution, sales and service.
Like Chrysler, General Motors has now hired bankruptcy advisers.
Related Links
Auto Industry Aid Bill Fails In Senate, GM Hires Bankruptcy Advisor [Jalopnik]
Rescue Bid for Detroit Collapses in Senate [Wall Street Journal]
Cars on the Brain [Industry Canada]
Senate Abandons Auto Bailout Bid [New York Times]
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