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Auto bailout talks fail over wage dispute

Source: PTI
December 12, 2008 10:57 IST
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The $14-billion bailout package for the troubled United States auto industry has collapsed in the Senate amid dispute over the wages paid to workers of the troubled manufacturing giants, according to a media report.

"The focus of talks was on seeking commitments to restructure the industry's debt load and bring labour costs in line with wages paid by Toyota Motor Corporation and Nissan Motor in the US," the Wall Street Journal said.

The talks fell apart after the Republicans insisted that wages should reach parity in 2009, but Democrats could not commit to any such swift action, according to the report.

"The Senate is expected to hold a vote on the White House-backed bill by the House, which is expected to fail. The collapse is a blow to Detroit's big three, two of which have said they wouldn't be able to last the year without federal aid.

"Both President Bush and President-elect Barack Obama urged senators of their respective parties to pass a bill. If the Senate muddles through, the House will have to come back to Washington to vote again," the WSJ said.

On Wednesday, the House of Representatives had passed the $14-billion bailout package for the cash strapped auto industry, which would have revived the fortunes of Ford Motor Company, General Motors and Chrysler.

However, only a handful of Republicans in the Senate had been willing to support the rescue package. While some raised concerns about government intervention in the marketplace, others are demanding the pending bill to be strengthened to exact concessions from the industry, the paper added.

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