The $14bn (£9.4bn) bail-out of the US car industry has failed to get enough support in a vote in the Senate. The bill was passed by the House of Representatives on Wednesday (December 10), but it failed to garner enough support from Republicans.
It is understood that cross-party talks stalled over Republican demands that the car workers union, United Auto Workers, agreed to wage cuts. The Democrats have a majority of one, and needed Republican support, as some of their own were not expected to back plans.
The bill aimed to stop the “Detroit Three” – Ford, General Motors and Chrysler – going into bankruptcy. GM has already warned that without a bridging loan, it will run out of money.
The White House, which backed the bill, said it was the best chance of saving the car companies and the large number of jobs reliant on the auto industry. It is thought that the Republican wanted wage cuts that would bring the industry in line with Japanese workers. The UAW rejected a drop in wages until 2011, when its current contract with the car companies runs out.
A new deal is not expected to be possible this year, although President-elect Barack Obama is thought to have supported the bill.