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White House reviews auto bailout

President George W. Bush questioned the ability of the wounded automotive giants to survive, prompting a meeting between White House aides and Democratic staffers.

Democrats sought to address administration concerns in a counter proposal, congressional aides said. Democrats said they remained confident a deal could be struck.

The White House wanted greater assurances that the automakers, in a long downward spiral, would be able to reorganize and compete.

The rescue aims to avert the threatened collapse of General Motors Corp and Chrysler LLC, saving more than 350,000 industry jobs and millions of others that depend on the industry.

“This is no blank check or blank hope,” Senate Majority Leader Harry Reid said as he reconvened the chamber.

GM, Ford and Chrysler submitted business plans to Congress last week along with a $34 billion bailout request.

The Bush administration hopes for a deal but insists that the companies be commercially viable.

“Viability means that all aspects of the companies need to be re-examined to make sure that they can survive in the long term,” Bush said in an interview with ABC News’ “Nightline.”

Both GM and Chrysler have requested billions by month’s end to replenish dwindling cash reserves. Ford Motor Co wants a line of credit that would not be tapped unless its finances deteriorate further than expected in 2009.

The Dow Jones industrials rose 298 points partly on hopes of a bailout deal. Ford stock was up 24 percent to $3.38, while GM was 20 percent higher to $4.93.

The plan would release loans later this month but Democrats dropped the idea of creating a single oversight figure, or “car czar,” to dictate company operations. The plan would still establish an oversight office to ensure compliance.

Also absent were any mandated changes in management but GM chairman and chief executive of Rick Wagoner is under pressure to quit. One key lawmaker, Democratic Sen. Christopher Dodd of Connecticut, has called on him to resign.

Democrats have avoided putting GM or Chrysler on a path toward bankruptcy or a required out-of-court reorganization. Still, GM seems headed for a wrenching restructuring.