Democrats finding ways to rescue Detroit

WASHINGTON: With the bailout of the three major auto makers in the United States hitting a big roadblock on Capitol Hill and within the Bush administration, law makers--particularly Democrats-- are looking at ways in which Detroit can be rescued without further rocking the boat on Wall Street which was badly hammered on account of the stalemate.
 
The fact that the Dow dropped below 8000 for the first time in five years did not seem to matter on Capitol Hill where Democrats are simply awed at the stubborn resistance of the White House and senior Republicans in the US Senate.
 
"And so we're watching this situation very closely. Other countries understand the importance of manufacturing, while we continue not to focus on partnering with our industries here at home. Germany has announced a great battery alliance, which is investing USD 650 million in advanced battery technology research" Senator Debbie Stabenow  of Michigan told the Senate Banking Committee Chaired by Senator Chris Dodd.
 
"By 2010, South Korea will spend USD 700 million on advanced batteries and developing hybrids. China offers multibillions of dollars in direct funding and incentives for R&D and so on. India has developed an automotive mission plan. And that's just related to R&D" she added listing some of the problems that the auto industries face.
 
"But the reality is we have our companies competing against countries, countries who pay for research, countries who pay for health care, countries that fight for their industry on trade agreements"  the law maker said.

And a top economist told the Senate Panel that a number of factors including currency manipulation and protectionism in Asia including India are contributory factors to the current auto crisis.
 
"The automobile industry has two major components, the Detroit three and the Japanese Asian and European transplants that assemble vehicles here. Both contributed vitally to our national economy. And ensuring that these companies have the means to compete is of the most important national interest" Peter Morici of the University of Maryland  said.
 
"The gradual erosion of the market shares of the Detroit three over the last several decades stems from higher labour costs having origins in wages, benefits, work rules, poor management decisions and less than fully  supportive government policies" he added.
 
"Although the government has been sympathetic to  the needs of this industry, the industry has fallen victim to currency manipulation and other forms of protectionism, predominantly in Asia, in Japan, Korea, China,India and elsewhere" Morici said.
 
The Democrats and the auto industry chiefs are asking the Bush administration to cough up USD 25 billions out the the USD 700 billions already forked out by taxpayers to get over the current financial mess. But the White House has balked at the idea saying that Congress has already  appropriated USD 25 billions in another fashion and that the wording here could be changed and passed afresh.
 
The White House has stepped up the ante by making the point that if the Congress and the Democrats leave town after the lame Duck session without the auto bailout that would be further two months of vacation time for law makers without addressing an important issue.

"... Congress will bear responsibility for  anything that happens in the next couple of months during their long vacation"  White House Press Secretary Dana Perino said.
 
House Speaker Nancy Pelosi is not in favour of re-writing the already approved monies for updating existing plants and the  Senate does not seem to have the sixty votes needed for cloture and a scheduled  test vote set for today has been postponed.
 
"It's hard to imagine that the US auto industry, in its current condition  that Senator Reid would just go home and unilaterally decide that they don't need to have a vote on something that actually could be supported for manufacturers that have a plan to become financially viable" Perino said.
 
The President elect Barack Obama has expressed his support for a separate USD 25 billion bailout of the auto industry but the Treasury Secretary Henry Paulson has joined the White House in expressing serious reservations in dipping this money out of the Troubled Relief Assets Programme.