Accessibility links

Breaking News

White House Says Auto Bailout Not Imminent

The Bush administration is attempting to dampen expectations for immediate government action to save America's troubled car manufacturers.

Two of America's main three automakers are believed to be weeks - if not days - away from bankruptcy. That is an outcome the Bush administration says should be avoided, yet White House spokeswoman Dana Perino says the president will not be rushed into making a hasty decision when it comes to federal intervention.

Perino was asked if a rescue plan for the auto industry is imminent.

"We did not signal that it would be almost immediate," she said. "I do not know of an imminent announcement coming from us. We are trying to take the time to do it right."

Last week, the Senate rejected a multi-billion dollar package of bridge loans to carmakers. After the vote, the White House signaled its willingness to consider other options it had previously ruled out, including possibly tapping funds from the $700 billion financial rescue package Congress approved in October.

Perino says the administration is reviewing the auto companies' financial figures while attempting to craft a government response to the situation. She says no one wants to see the U.S. auto industry go bankrupt, but that President Bush will only approve a rescue plan if he is satisfied that the industry will put itself on a path to long term viability.

"One of the options here is allowing the companies to go into a disorderly bankruptcy," she said. "That is one of the options that is least favored by the president. Put it at the bottom of the list, because he does not think, I the current weakened state of our economy, we could sustain such a body blow."

Millions of American jobs are tied directly or indirectly to the country's domestic automobile industry, widely viewed as the backbone of the shrinking U.S. manufacturing base.

For years, American carmakers have focused on larger vehicles, almost ceding the small car market to foreign brands. Sales of trucks and utility vehicles plummeted when fuel prices skyrocketed earlier this year, and vehicle sales of all kinds have faltered during the economic slowdown.