My plan would be a pre-arranged reorganization and not a bailout, as unsettling as it is to watch the stock market get whipped around in reaction to this political maneuvering. 
White House considers help for car makers
White House says it may step in to help automakers with Wall Street bailout money
Ken Thomas and Julie Hirschfeld Davis, AP Writers
Under mounting pressure to act, the Bush administration said Friday it was ready to step in and prevent the U.S. auto industry from collapsing after the Senate refused to pass a rescue bill endorsed by the White House and congressional Democrats. The most obvious source of help was the Wall Street bailout fund.
"The current weakened state of the economy is such that it could not withstand a body blow like a disorderly bankruptcy in the auto industry," White House press secretary Dana Perino said.
Treasury spokeswoman Brookly McLaughlin said, "Because Congress failed to act, we will stand ready to prevent an imminent failure until Congress reconvenes and acts to address the long-term viability of the industry."
The Wall Street bailout fund was one of the few remaining options for General Motors Corp. and Chrysler LLC, which have said they could run out of cash within weeks. President George W. Bush had originally refused to use the bailout fund to help the automakers, insisting that help come from Congress. But the White House said it must reconsider after the Senate failed to agree on a $14 billion rescue plan.
"Congress spoke last night. They don’t have the votes to do anything," Perino told reporters on Air Force One as Bush traveled to a commencement speech in Texas. "They didn’t get it over the goal line and so we have to consider what other options we would take." She declined to say when a decision would be made.
President-elect Barack Obama said he was disappointed that the Senate failed to act. "My hope is that the administration and the Congress will still find a way to give the industry the temporary assistance it needs while demanding the long-term-restructuring that is absolutely required," he said in a statement.
About $15 billion from the first half of the $700 billion financial bailout remains uncommitted. Treasury in the past two months has pumped out about $335 billion to banks and insurance companies. To begin tapping the second half of the bailout, the administration would first have to notify Congress, which could block it or put new conditions on how the money is used.
In Detroit, United Auto Workers President Ron Gettelfinger welcomed the Treasury’s statement Friday.
"I think it’s great news — the response that we’ve been getting out of both the White House and the Treasury," he said. "I’m not sure what this means, how much they’re talking about, any terms or conditions that are associated with it. … But I do know this, we cannot afford for there to be a run on the banks, if you will, at those companies."…
The Bush administration has repeatedly said the Wall Street bailout fund should not be used for emergency aid to the automakers because it was designed to restore stability to the financial sector. But with the Senate’s action, Detroit’s supporters looked to the White House for help.
"Plan B is the president," said Sen. Carl Levin, D-Mich. House Speaker Nancy Pelosi said action by Bush was the "only viable option."
"For God sakes, I hope the president acts," exclaimed Mayor Virg Bernero of Lansing, Mich.
Detroit’s carmakers employ nearly a quarter-million workers, and more than 730,000 others produce materials and parts for cars. If one of the automakers declared bankruptcy, some estimate as many as 3 million U.S. jobs could be lost next year.
Many congressional Republicans and some economists said the companies would be best to pursue a prearranged bankruptcy that would allow them to restructure quickly. But most Democrats and the carmakers rejected that, arguing it would quickly lead to liquidation because consumers would never buy cars from a bankrupt auto company.
Perino, speaking on Bush’s plane, said that, "Under normal economic conditions we would prefer that markets determine the ultimate state of private firms. However, given the current weakened state of the U.S. economy, we will consider other options if necessary, including use of the TARP (bailout) program to prevent a collapse of troubled automakers."
"A precipitous collapse of this industry would have a severe impact on our economy and it would be irresponsible to further weaken and destabilize our economy at this time," she said. "While the federal government may need to step in to prevent an immediate failure, the auto companies, their labor unions and all other stakeholders must be prepared to make the meaningful concessions necessary to become viable."…
GM trying to survive for a shot at Plan O — Obama
Tom Krisher, AP Auto Writer
With Senate roadblock, General Motors has few options to coast into Obama administration
DETROIT (AP) — General Motors is saving every cent it can, from shutting down escalators at night to limiting workers’ choice of pens, in case it needs to fight to survive beyond year’s end and until a friendlier Washington takes over.
Yet even a truckload of penny-pinching might not be enough.
GM has already cut its U.S. work force by almost 80,000 people this decade, reducing it to 96,000, and it has idled five factories and laid off 11,000 domestic workers this year alone.
The cost-cutting has accelerated as cash has dwindled…
Experts say their best shot is for President-elect Barack Obama to persuade the outgoing White House to free up emergency loans from the $700 billion federal bailout, or to have the Federal Reserve make a loan.
The $14 billion auto-industry bailout bill died in the Senate late Thursday after the United Auto Workers refused to accept Republican demands for swift wage cuts to bring UAW workers’ pay in line with Japanese carmakers.
Senate Majority Leader Harry Reid said he hoped President George W. Bush would tap the Wall Street bailout fund for emergency aid to the automakers.
Barring that, GM and Chrysler must continue to cut even the smallest expenditures and hold off payments to parts suppliers as they hoard cash and try to stay alive until Obama takes office Jan. 20 and could take his own action.
GM has hinted it might not make it through the end of the year before running out of cash. But GM board member Kent Kresa said earlier this week that the company might make it into the first quarter, depending on auto sales…
Its CEO, Robert Nardelli, said its cash would drop to $2.5 billion, its minimum to survive, at the end of the year. It has cut 32,000 workers since private equity firm Cerberus Capital Management LP took over control in August of last year, including 25 percent of its salaried work force last month…
"It’s certainly not beyond the scope of possibility that they’ll get this thing through," Hart said. "I think it’s hard for Republicans to have this on them. There’s a lot of pressure. They might work out a deal."
Hundreds of thousands of jobs hang in the balance. The Detroit Three employ 239,000 workers in the U.S. Counting other businesses that depend on the automakers, economists estimate that 2.5 million jobs would be lost if all three companies went out of business…
"Then you have this game of musical chairs where everyone wants to make sure they’re not the one left without a chair," she said. "That very process can bring the whole structure down"…
