Crunch time for US motor industry's bailout hopes

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Senate Democrats plan to introduce legislation today attaching a bailout for Detroit to a Bill extending unemployment benefits that has already cleared the lower house.

The Big Three, General Motors, Ford and Chrysler, are seeking $25 billion (£16.9 billion) from the $700 billion financial industry bailout fund for emergency loans. The companies have offered to reduce the size of the package in a bid to get it passed by Congress.

The issue has become a political hot potato. The White House has opposed help for the industry but has said it would back assistance through a previously approved $25 billion loan programme. That money was meant to be used to retool to make more fuel-efficient vehicles but the White House says it would allow the companies to use it for emergency purposes.

The Democrats will need some Republican support to get a rescue through Congress but face an uphill struggle. Republican senators Richard Shelby and Jon Kyl say any bailout would only postpone the industry's demise.

"Companies fail every day and others take their place. I think this is a road we should not go down," said Shelby. "They're not building the right products. They've got good workers but I don't believe they've got good management. They don't innovate. They're a dinosaur in a sense."