Big Three ask congress for a $25bn bail-out

The bosses of GM, Ford and Chrysler (also known as big three US carmakers) ask Congress for a $25bn aid to rescue US car industry.

In a Senate hearing, they told that their firms were at greater risk of collapse without the rescue package.

Rick Wagoner, GM chief executive, said: “A financial chasm has opened up and the firm needs a loan to span it.”

On the other hand, Republicans and the White House do not seem to use the $700bn bank bail-out to assist car firms.

GM warns that the company can run out of cash in the next few weeks and can’t wait until President-elect Barack Obama is sworn in January. Barack Obama has promised to help auto industry.

Mr. Wagoner told the Senate committee that the auto industry’s current problems were because of the deepening global financial crisis and not due to management failures.

Mr. Wagoner warns that without government action, millions of jobs and 4% of GDP could be lost.

However, senators from both sides appeared to be least sympathetic for the industry.

Christopher Dodd, the committee chairman, said: “auto industry is trying to seek treatment for some largely self-inflicted wounds.”

However, Dodd agreed that if the auto companies were allowed to collapse, thousands of people would lose their jobs.