No answer yet for automakers

Congress gives firms deadline in bid for US aid

HOMEWORK ASSIGNMENT House Speaker Nancy Pelosi was among Democratic leaders who told struggling automakers to develop a plan to rebuild their industry.

WASHINGTON - Show us the plan and we'll show you the money.

That's the message the Democratic-led Congress gave Detroit's Big Three automakers yesterday.

With that, bailout-fatigued lawmakers closed up shop for Thanksgiving, leaving the nation's once-mighty and now foundering car companies scrambling like scolded schoolchildren to finish an overdue assignment in time to salvage their grade.

Only this time, it's their very industry - and the millions of jobs that depend on it - that's at stake.

"We want them to get their act together. We want them to come up with something," said Senate majority leader Harry Reid, a Nevada Democrat.

The deadline is Dec. 2.

That's when General Motors Corp., Ford Motor Co., and Chrysler LLC have to give Congress a plan for rebuilding and modernizing their industry convincing enough to persuade skeptical lawmakers that they should get a federal lifeline. If they do, Congress might return the following week to vote on a multimillion-dollar loan package.

Then again, it might not.

"Think of us as a venture capital firm," suggested Senator Christopher Dodd, a Connecticut Democrat, and the Senate Banking Committee chairman. "And we're asking them, 'What are you going to do if you get this investment from us?' "

So far, the companies - clobbered by lackluster sales and choked credit - have painted a grim picture of what would happen if they don't get the aid. GM has said it could go under before year-end, and Chrysler might not be far behind.

Ford has said it can survive through 2009, but it's unclear how much longer - and if even one company were to collapse, it could cause a cascade and devastate the rest.

The demise of the rescue - at least for now - left the automakers' fate uncertain, and sent Wall Street plunging. The Dow Jones industrials dropped 445 points, the second straight plunge of more than 400, and hit the lowest point in nearly six years.

Failure of one or more of the Big Three would be another severe blow to the battered economy - and to many Americans' view of the nation's industrial strength - and throw a million or more additional workers off the job.

Democratic leaders scrapped votes on the auto rescue, postponing until next month a politically tricky decision on whether to approve yet another unpopular bailout at a time of economic peril, or risk being blamed for the implosion of an industry that employs millions and has broad reach into all aspects of the US economy.

GM, Ford, and Chrysler quickly issued statements promising to submit the blueprint the Democrats demanded.

For now, however, the Democrats said the aid plan lacked the support to pass Congress and be signed by President Bush.

Bush and congressional Republicans had balked at Democrats' suggestion to draw emergency auto industry loans from the $700 billion Wall Street rescue fund.

Still, Democratic leaders were unwilling to close up shop for the year and appear to be turning a deaf ear to the industry. So they assigned the carmakers homework and said they might yet get their help.

"We're saying, 'OK, we know you must be working on this,' " House Speaker Nancy Pelosi, a California Democrat, said. "Have it for us in the next week and a half."

The White House criticized the delay, saying the plan to let the automakers tap the fuel-efficiency loans for their short-term cash needs should be considered.