Accord reached on U.S. auto bailout

Special Report:Global Financial

Crisis

BEIJING, Dec.7 -- Congressional Democrats and the White

House have reached agreement on emergency aid for U.S. car makers of between 15

billion U.S. dollars and 17 billion dollars, according to senior congressional

aides.

The outline of the package was reached after auto

executives pleaded with law makers for help and U.S. data showed employers axed

more than 533,000 jobs in November, the highest monthly job loss in 34 years.

A worker loads a Toyota automobile onto

a car carrier as other Toyota automobiles are lined up in an holding lot

at the Port of Long Beach, California Dec. 4, 2008. Congressional

Democrats and the White House have reached agreement on emergency aid for

U.S. car makers of between 15 billion U.S. dollars and 17 billion dollars,

according to senior congressional aides. (Chinese media/Reuters

Photo)
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Gallery

"Congressional Democrats and the White House have

reached an agreement," a senior congressional aide said on Friday.

Another source said negotiators had "agreed in

principle to moving ahead but details have to be worked out." More talks on the

aid were expected yesterday with Congressional votes on a bill next week.

The temporary funding amount is far less than the 34

billion dollars in loans requested by General Motors, Ford Motor, and Chrysler,

but it would sustain them into next year.

Daniel Weiss, a senior fellow with the Center for

American Progress, said he expected Democrat law makers to seek more money for

car makers after Barack Obama is sworn in as president.

Leaders of the U.S. automotive industry

testify at a hearing held by the House Financial Services Committee on

Capitol Hill in Washington Nov. 19, 2008. From left are General Motors CEO

Richard Wagoner, Chrysler Chairman and CEO Robert Nardelli and Ford

president and CEO Alan Mulally.(Chinese media/Reuters Photo)
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"A short-term loan agreement is like putting a

Band-Aid on a hemorrhage and they will still have to try and save the patient in

January," said Weiss.

The car makers say they need help to survive a sharp

downturn in sales fueled by the credit crisis and recession.

At hearings last week, many law makers were skeptical

of the companies' viability, arguing they had failed in the past to cut

sufficient costs, ween themselves from making gas guzzlers and produce

innovative cars consumers wanted to buy.

Earlier on Friday, U.S. House of Representatives

Speaker Nancy Pelosi dropped her insistence that aid come from the

700-billion-dollar financial services bailout fund the Bush administration had

refused to use for car makers. It will now come from an Energy Department loan

fund.

(Source: Shanghai Daily/Agencies)

GM, Chrysler "considering

bankruptcy"

BEIJING, Dec. 5

-- General Motors Corp and Chrysler LLC executives are considering accepting a

pre-arranged bankruptcy as the last-resort price of getting a

multibillion-dollar government bailout, said a person familiar with their

internal discussions.

Auto executives have warned bankruptcy would lead to

liquidation as customers abandoned the companies. Staff for three members of

Congress have asked restructuring experts if a pre-arranged bankruptcy -

negotiated with workers, creditors and lenders - could be used to reorganize the

industry without liquidation, a person familiar with that matter said.

U.S. jobless rate rises to highest

level in 15 years

A homeless man cadges on a street of

Manhattan, New York, the United States of America, Nov. 11, 2008. (Chinese media

Photo)
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Gallery

WASHINGTON, Dec. 5 (Chinese media) -- The unemployment rate in

the United States rose to 6.7 percent in November, the highest level in 15

years, as employers slashed 533,000 jobs, the most since December 1974, the

Labor Department reported Friday.

Employers have cut jobs each month this year. Job losses

in September and October turned out to be much worse. Employers cut 403,000 jobs

in September, versus 284,000 previously reported, and axed 320,000 in October,

compared with an initial estimate of 240,000.

Bush acknowledges U.S. economy in

recession

WASHINGTON, Dec. 5

(Chinese media) -- U.S. President George W. Bush Friday acknowledged for the first time

that the U.S. economy was in recession.

"Today's job data reflects the fact that our economy is in

a recession," Bush said hours after the Labor Department reported that the

unemployment rate rose to 6.7 percent in November, the highest level in 15

years.