A $14 billion emergency bailout for U.S. automakers collapsed in the Senate Thursday night after the United Auto Workers refused to accede to Republican demands for swift wage cuts.
Senate Majority Leader Harry Reid said he was "terribly disappointed" about the demise of an emerging bipartisan deal to rescue Detroit's Big Three.
He spoke shortly after Republicans left a closed-door meeting where they balked at giving the automakers federal aid unless their powerful union agreed to slash wages next year to bring them into line with those of Japanese carmakers.
In related news General Motors has reportedly hired bankruptcy lawyers and restructuring consultants as lawmakers continue to debate the terms of a possible bailout of the ailing automaker.
The Wall Street Journal reported late Thursday that GM has tapped Harvey Miller of New York law firm, Weil Gotshal & Manges LP, to handle any potential bankruptcy filing. Miller is a "bankruptcy veteran," according to the Journal.
GM has also reached out to "restructuring veterans" Jay Alix of Questor Management Company, Evercore Partners' William Repko, and Blackstone Group's Arthur Newman, the Journal said.
The reports come as Senate lawmakers consider a $14 billion bailout package that would provide loans for General Motors, Chrysler and Ford Motor (F, Fortune 500).
GM (GM, Fortune 500) has been burning through cash as sales plummet and credit remains tight. The automaker has said it will run out of operating capital next year if the government loans are not approved.
Last week, the Journal reported that Chrysler LLC hired bankruptcy law firm Jones Day.
(Source: CBS News / Yahoo News)
http://www.theyeshivaworld.com/article.php?p=27111
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