WASHINGTON — The White House gave troubled Detroit automakers public reassurances Monday that short-term government help was in the works as a key senator suggested the aid package could reach $15 billion for two companies.
President George W. Bush said the bankruptcy of a domestic car company would undermine the nation’s economy as it grapples with a financial meltdown.
General Motors and Chrys ler have said they could run out of cash within weeks without support from the government.
“An abrupt bankruptcy for autos could be devastating for the economy,” Bush told reporters aboard Air Force One during a surprise trip to Iraq and Afghanistan. “We’re now in the process of working with the stakeholders on a way forward. We’re not quite ready to announce that yet.”
In Detroit, Sen. Carl Levin, D-Mich., said he expects GM to get $8 billion and Chrysler $7 billion under the Bush administration’s plan. He said the Treasury secretary likely would be tapped as a “car czar” to oversee restructuring of the companies.
Bush wouldn’t give a precise timetable but said, “This will not be a long process, because of the economic fragility of the autos.”
Vice President Dick Cheney, in an interview with conservative talk-show host Rush Limbaugh, said the auto industry’s woes came at an “especially bad time” because of the slowdown of the financial markets.
“We’re on the downside of a recession that may be the worst since World War II. And if the automobile industry goes belly-up now, there’s a deep concern that that would be a major shock to the system,” Cheney said.
The administration, following the defeat of a $14 billion bailout package in the Senate last week, is considering several options.
They include using money from the $700 billion financial-bailout fund to provide loans to the carmakers or using money from the fund as collateral for emergency loans the automakers could get from the Federal Reserve.
