U.S. Senate seeks compromise on auto bailout

By John Crawley

WASHINGTON (Reuters) - Senate negotiators sought on Wednesday to craft a compromise plan to bail out distressed U.S. automakers as industry chief executives came under new pressure from lawmakers to justify urgent assistance.

With a $25 billion (16 billion pound) Democratic bailout proposal in the Senate stalled due to weak support, the legislative emphasis shifted to a plan endorsed by Republicans and the White House. But prospects for a deal were far from certain with time running low on the abbreviated congressional session.

Minority Leader Mitch McConnell said in remarks on the Senate floor that a compromise effort "is the only proposal being considered" that has any chance of becoming law now.

"There is a way forward that will help protect the jobs in the auto industry, while also protecting taxpayers," McConnell, a Kentucky Republican, said.

A senior Democrat, Banking Committee Chairman Christopher Dodd, said he was "anxious to see something happen" but "frankly, the idea that there's going to be a bill, I think is remote."

General Motors, Ford and Chrysler are burning through billions in cash monthly and have little to no ability to raise capital in the private markets due to their poor financial health and the global credit crunch.

Chief executives from the three manufacturers warned at a Senate hearing on Tuesday and again on Wednesday before the House of Representatives of potential industry failure and broader economic hardship without immediate government aid.

"We don't like being here asking for this," said GM Chief Executive Rick Wagoner. "So at this point, without injections of liquidity ... probably some portion of the domestic industry will not survive."