By John Crawley and Thomas Ferraro
WASHINGTON (Reuters) - Republicans on Wednesday tore into a Democratic proposal that would force Detroit automakers to restructure or dissolve, saying the plan was deeply flawed and a downpayment on failure.
The House of Representatives began consideration of the measure to provide up to $14 billion in rescue loans hours after Democrats introduced their legislation negotiated with the White House. A House vote on passage was expected late in the day.
But prospects for quick approval dimmed in the Democratic-led Senate, where Republicans threatened to slow or even block the plan with procedural maneuvers.
"I hope we can come together on this," said Democratic Sen. Debbie Stabenow, whose home state of Michigan is headquarters for General Motors Corp., Ford Motor Co. and Chrysler LLC.
George Voinovich, an Ohio Republican and co-chairman of the Senate auto caucus who supports help for Detroit, said he did not think the votes for Senate passage were there yet "on our side of the aisle."
Voinovich said, "There is still some effort that's going to have to be made."
Both the House and Senate would have to pass an identical measure before it could be sent to President George W. Bush to sign into a law.
GM shares fell for a second straight day on Wall Street as uncertainty gripped the bailout they are counting on to prevent their possible collapse. Ford shares closed slightly higher.
GM and Chrysler both want billions by month's end to survive. Ford is seeking a line of credit to be tapped if its finances worsen more than expected in 2009.
Democrats are proposing direct bridge loans or lines of credit using funds previously appropriated for helping automakers retool factories and make more fuel efficient cars. In return, carmakers would give the government an equity stake equal to 20 percent of whatever is borrowed.
Any loans are intended to carry the companies through March 31, after which more help would depend on the quality of restructuring plans submitted to the government.
A presidentially appointed trustee, or "car czar" would enforce a myriad of conditions and judge restructuring, including the fairness and depth of concessions from labor, management, bondholders, vendors and lenders.
The "car czar" would report to Congress and could recommend bankruptcy as a restructuring option if the official deems restructuring plans inadequate.
Other conditions would prohibit bonuses for officers or "golden parachutes" and would make the companies sell or terminate leases on their corporate jets.
But the planned conditions and "car czar" powers are not strong enough for some lawmakers, some of whom want ironclad guarantees on wage and other concessions and a clearer outlook on how the stricken companies plan to be competitive.
Senate Republican leader Mitch McConnell said Republicans want a bill that forces automakers, long struggling to compete with more fuel-efficient foreign-made vehicles, "to reform their bad habits."
Sen. Bob Corker of Tennessee, a member of the Banking Committee, said fellow Republicans would try to craft an alternative that "has teeth and really moves things along very very quickly."
"Everything is in flux," said a Republican Party leadership aide, brushing off efforts by the unpopular and outgoing Bush administration to strike a deal with Democrats.
President-elect Barack Obama is set to replace Bush on January 20 and launch a sweeping plan of his own to revitalize the U.S. economy, which could plunge deeper into recession if the auto industry collapses.
The auto bailout has divided Congress. Many lawmakers say market forces, not a government saddled with a record deficit, should determine the automakers' fate.
There also is reluctance to provide another federal rescue in the wake of the voter backlash against Congress for its passage of a $700 billion bailout for Wall Street in October.
At the same time, many argue that if Congress provided relief for millionaires in the U.S. financial industry, it should also help blue-collar autoworkers facing unemployment.
A CBS News poll found Americans split on whether taxpayer funds should help automakers, but that most believe if they do get federal relief the government should have a say in management and require more fuel-efficient cars.
(Additional reporting by Matt Spetalnick, Rachelle Younglai, Donna Smith and Richard Cowan in Washington; Editing by David Alexander)