Bush administration assures U.S. automakers

President George W. Bush said the bankruptcy of a domestic car company would undermine the nation's economy as it grapples with a financial meltdown. General Motors Corp. and Chrysler LLC have said they could run out of cash within weeks without support from the government.

"An abrupt bankruptcy for autos could be devastating for the economy," Bush told reporters aboard Air Force One during a surprise trip to Iraq and Afghanistan. "We're now in the process of working with the stakeholders on a way forward. We're not quite ready to announce that yet."

In Detroit, Michigan, the heartland of the auto industry, Democratic Sen. Carl Levin said he expects GM to get $8 billion and Chrysler $7 billion under the Bush administration's plan. He said Treasury Secretary Henry Paulson probably would be tapped as a "car czar" to oversee restructuring of the companies.

Bush would not give a precise timetable but said: "This will not be a long process because of the economic fragility of the autos."

Vice President Dick Cheney, in an interview with conservative talk show host Rush Limbaugh, said the auto industry's woes came at an "especially bad time" because of the slowdown of the financial markets.

"We're on the downside of a recession that may be the worst since World War II. And if the automobile industry goes belly up now, there's a deep concern that that would be a major shock to the system," Cheney said.

The Treasury Department, which has been in discussions with GM and Chrysler officials and reviewing financial data from the car makers, said Monday that no decision had been made on the type of support it may provide to the companies.

Automakers said they could not predict the timing or details of any help.

"The nature and the length of the discussions are proportionate to the complexity of our company and our financial structure," said GM spokesman Greg Martin.

The administration, after the Senate rejected a $14 billion bailout package last week, is considering several options. They include using money from the $700 billion financial bailout fund to provide loans to the carmakers or using money from the fund as collateral for emergency loans the automakers could get from the Federal Reserve. Bush reiterated Monday that tapping the financial bailout fund remains an option.

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