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Senate Cancels Auto Industry Bailout Vote

The U.S. Congress failed to reach an agreement on how to proceed with a proposed $25 billion bailout for the American auto industry, with Senate Majority Leader Harry Reid (D-Nev.) canceling a scheduled vote with only two days remaining in the current lame duck session of Congress. During testimony before the House of Representatives Financial Services Committee, the CEOs of all three U.S. auto companies - Rick Wagoner of General Motors (GM), Alan Mulally of Ford, and Robert Nardelli of Chrysler - faced harsh criticism about their business practices that was highlighted by news reports that the three had traveled to the hearings on company-funded private jets even as they cut jobs and close factories. The three CEOs argued that they have all renegotiated union contracts and started to produce fuel efficient vehicles but were hit hard by the financial crisis. Bloomberg News reports that there is still a possibility that President George W. Bush could authorize a previously approved $25 billion, earmarked for the development of fuel-efficient vehicles, to be dispersed instead for operating expenses. Both GM and Chrysler have said that without the bailout, they may be forced to file for bankruptcy protection in the next few months.

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