难以想象今天晚上的美国股市会怎样。。。

Auto Bailout Collapses on Wages

Senate Republicans refuse $14 billion in aid after UAW's Gettelfinger balks at fast wage cuts. GM, Chrysler hire bankruptcy advisors

By David Kiley and David Welch

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Last-ditch efforts to forge an agreement to rescue the U.S. automakers fell apart late Thursday, Dec. 11, when union officials refused fast and deep cuts in worker pay. The collapse created the real possibility that General Motors (GM) and Chrysler will face bankruptcy in a matter of weeks, unless the Treasury Dept. acts to prevent it.

Senate Minority Leader Mitch McConnell (R-Ky.) said on the Senate floor Thursday night that a refusal of the United Auto Workers, headed by Ron Gettelfinger, to agree to lower wages and benefits at parity with workers at Toyota (TM) and Honda (HMC) in the U.S. by a date certain in 2009 was the last sticking point preventing Republicans from supporting the bill.

"We were three words away from a deal," said Senator Bob Corker (R-Tenn.), who spent all day trying to broker an agreement between Republicans, the union, and the auto companies. Tennessee is home to a GM and Nissan (NSANY) plant, as well as a future Volkswagen (VOWG.DE) plant and several supplier facilities.

Officials from the UAW did not return phone calls at press time.

"It's disappointing that Congress failed to act tonight," the White House said in a prepared statement. "We think the legislation we negotiated provided an opportunity to use funds already appropriated for automakers and presented the best chance to avoid a disorderly bankruptcy while ensuring taxpayer funds only go to firms whose stakeholders were prepared to make difficult decisions to become viable."

"A Loss for the Country"

The Senate rejected the bailout 52-35 on a procedural vote after the talks collapsed.

Senate Majority Leader Harry Reid (D-Nev.) called the bill's collapse "a loss for the country," adding: "I dread looking at Wall Street tomorrow. It's not going to be a pleasant sight."

The bill called for $14 billion to be divided between GM and Chrysler, both of which are at the financial breaking point as the recession and consumer credit crunch have crippled their finances. The companies, anticipating failure in the Senate, have hired bankruptcy law firms. Ford (F) has said it doesn't need federal assistance now but has asked for a $9 billion line of credit in case sales deteriorate below the current level.

According to Corker, bond holders that conferred with lawmakers Thursday agreed to take a 70% writedown on debt they hold from the automakers, and to take half of the remainder in stock. GM has $42 billion in debt, not counting payments the company must make to the union's health-care trust in 2010. As part of the deal, the UAW also agreed to take half of its future $21 billion in payments to its health-care fund in stock. "The companies would have been stronger than they have been in 40 years, or headed for Chapter 11," said Corker.

Senator Debbie Stabenow (D-Mich.) took a harsh and emotional tone with Republicans who voted against the bill. "Evidently the only thing that matters to those on the other side of the aisle is that workers make too much money," she said.

In a prepared statement, GM said: "We are deeply disappointed that agreement could not be reached tonight in the Senate despite the best bipartisan efforts. We will assess all of our options to continue our restructuring and to obtain the means to weather the current economic crisis." A Chrysler statement said: "Chrysler LLC is obviously disappointed in what transpired in the Senate and will continue to pursue a workable solution to help ensure the future viability of the company."

The only measure separating the two companies from likely bankruptcy by January, said auto executives Thursday night, would be a reversal in position by the White House and Treasury Secretary Henry Paulson to use a small portion of the $700 billion Wall Street bailout fund to tide the companies over to a new Congress and the Obama Administration in January. Democrats also will add to their ranks in the Senate then, which may be enough to get the bill passed.

The Ripple Effect

GM sources said the company's next move is to the Bush Administration, where the automaker will seek help from the Treasury Dept. or Federal Reserve. As a last-ditch strategy, GM has hired bankruptcy expert Harvey Miller of Weil, Gotshal & Manges in case the company runs out of cash and options, GM sources confirmed. But Chairman and CEO G. Richard Wagoner Jr. and GM's board are fighting to avoid bankruptcy, which they believe would send the company into liquidation, lead director George Fisher told BusinessWeek last week.

The House of Representatives passed a bill Wednesday, Dec. 10, that approved the loan package and had the support of the White House. It called for a "car czar" to oversee the automakers' restructuring over the first three months of the year. If benchmarks toward financial viability were not reached, the bill allowed the government to call the loans and force a Chapter 11 filing for the companies.

The cost to the taxpayer of GM and Chrysler bankruptcies could far exceed the amount of the loans denied by Congress. It is widely believed that a bankruptcy filing by GM will repel vehicle buyers, thus collapsing the company's revenue stream. The ripple effect would, many analysts believe, take down hundreds of supplier companies as well as force a bankruptcy filing by Ford.

The government would be on the hook for guaranteeing the automakers' pensions, as well as the additional unemployment and Medicaid payouts. The Center for Automotive Research estimates that around 3 million jobs could be lost in the next year following cascading bankruptcies.

Kiley is a senior correspondent in BusinessWeek's Detroit bureau. Welch is BusinessWeek's Detroit bureau chief.

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