Obama says automakers a high priority

By John Crawley

WASHINGTON (Reuters) - President-elect Barack Obama said on Friday federal help for the distressed auto industry is a "high priority" of his transition, while the chief executive of General Motors Corp (GM.N) is confident of government intervention.

Separately, a senior Democratic leader in the U.S. House of Representatives said any decision to propose emergency bailout legislation to assist GM, Ford Motor Co (F.N) and Chrysler LLC could be reason enough to call a special session of Congress later this month.

GM, Ford and Chrysler chief executives met Democratic congressional leaders on Thursday to discuss prospects of immediate help to counter plunging sales and steep losses the industry blames on the global credit meltdown. The industry is seeking a bailout of up to $50 billion (32 billion pounds).

Automakers and Democratic leaders have discussed a two-stage process in which government would provide $25 billion in direct loans to meet urgent needs, said industry and congressional officials with knowledge of talks.

A second $25 billion would come later and could be applied to a United Auto Workers (UAW) retiree health care trust, freeing up more cash for operations.

The stakes rose on Friday when GM said it had burnt through $6.9 billion in cash in the third quarter and issued a warning on future liquidity. Ford ran through $7.7 billion but expects its cash burn rate to be slower this quarter.

Alan Mulally, Ford CEO, told analysts the company had sufficient liquidity and its business plan at the moment does not assume government assistance.

GM CEO Rick Wagoner said in an interview with Bloomberg Television that he was confident the government would come through with aid.