The $14-billion bailout package for the troubled American auto industry has received the approval of the House of Representatives and now it will be tabled in the Senate next.
After hours of intense debate to help the struggling auto sector in the United States, the House of Representatives approved the bill 237 to 170. This bill would provide money within a few days to cash-strapped General Motors, Ford Motor and Chrysler.
The legislation would now be tabled in the Senate, where it will face a tough time because of stiffer Republican opposition.
The House passed the Auto Industry Financing and Restructuring Act, entailing $14-billion loan, for the three US auto manufacturers, and allows a Presidential designee to oversee the restructuring of the auto manufacturing industry and to ensure long-term financial viability.
As per the legislation, each eligible manufacturer is required to submit a long-term restructuring plan by March 31, 2009 to an auto czar to be named by President George Bush.
Loans made under this act will be for seven years at an annual interest rate of five per cent during the first five years and 9 per cent for the following two years.
GM, Ford and Chrysler have already presented their bailout proposals worth up to $34 billion to stave off a possible bankruptcy. Auto firms are in financial trouble after steep decline in their sales in the recent months.
The bill allows US President George Bush to designate one or more officers (auto czars) to oversee the restructuring of the auto manufacturing industry and to ensure that they can achieve long-term financial viability.
The auto czar would have the authority to review and veto decisions made by eligible automotive manufacturers that are over $100 million.
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