Bailout falls through

News of the failure caused markets across the Asia-Pacific region to dive by 3 percent. Hong Kong's Hang Seng index and Japan's Nikkei average were both down more than 5 percent.

Meanwhile, Toyota shares shed 10 percent of their value, while shares of Honda were down 12.5 percent.

With the failure of this bailout, Democrats have turned to lobbying the Bush administration to direct a portion of the $700 billion bailout towards aiding the Big Three automakers.

The U.S. Treasury Department insists that the $700 billion fund has been earmarked for the financial sector only.

[B]A Second chance?[/B]
U.S. Sen. Christopher Dodd stated that it may be possible for Congress to take another shot at a bailout package in January, when Democrats will have a bigger majority in both the Senate and Congress.

But January might be too late for GM. While Chrysler is said to be able to survive until March, and Ford reportedly being somewhat better off and only needing a line of credit "just in case", GM on the other hand, will probably need to choose a date to file for bankruptcy. General Motors is in need of an $8 billion loan to see it through January.

[B]Layoffs[/B]
If the Big Three fail, their collapse will send a huge ripple through the economy. The three automakers directly employ almost 250,000 workers. But their suppliers, who employ about 100,000, will also be hit hard.

Surveys show that Americans are evenly split when it comes to the bailout issue. Those who are in favor of cite the bigger picture - further job losses that could prolong the economic crisis.

Those against the bailout point out that the Detroit automakers have stubbornly resisted tougher fuel economy standards whilst continuing to produce shoddy cars that few buyers were interested in.

Credits: JRC