By Thomas Ferraro and John Crawley
WASHINGTON (Reuters) - Efforts to provide emergency loans to struggling U.S. automakers gained momentum on Friday after a grim U.S. jobs report spurred talks between Democratic leaders in Congress and the White House.
U.S. House Speaker Nancy Pelosi dropped her insistence that the money come from the $700 billion financial bailout fund that the Bush administration had refused to use on automakers, said a congressional aide familiar with the discussions.
"Congress is considering various short term funding options for the American automobile industry." Pelosi said in a statement.
Earlier on Friday, the chief executives of General Motors Corp, Ford Motor Co and Chrysler LLC wrapped up their second visit to Washington in as many weeks, seeking a total of $34 billion in loans.
The automakers say they need help to survive a sharp downturn in sales fueled first by the credit crisis and now recession.
Pelosi said she would consider, with conditions, tapping an existing $25-billion advanced energy technology loan fund to help auto companies - an idea the White House has promoted.
"We will not permit any funds to be borrowed from the advanced technology program unless there is a guarantee that those funds will be replenished in a matter of weeks so as not to delay that crucial initiative," she said.
Compromising on the source of funds would likely build bipartisan support in Congress for a bill that could be signed into law by President George W. Bush, a Republican.
White House spokesman Tony Fratto declined to comment on any discussions related to the automakers bailout.
Both Pelosi and Senate Majority Leader Harry Reid said in statements they expected to have votes next week on an automaker assistance plan.
MORE TALKS EXPECTED
More talks between Democratic leaders in Congress and the White House were due on Saturday. "We will meet tomorrow and go from there," a congressional source said, speaking on condition of anonymity.
Another congressional source rejected suggestions that the Democrats had a framework or an outline for an agreement with the White House. "We are still working on it," the aide said.
The appearance of the CEOs before lawmakers on Friday was preceded by U.S. government data showing employers axed more than 533,000 jobs in November, the highest monthly job-loss in 34 years.
Congress and the White House are anxious to prevent the threatened near-term collapse of one or more of the Detroit Three - which directly employ 250,000 people.
"In the midst of the worst economic situation since the Great Depression it would be an unmitigated disaster," said Rep. Barney Frank, chairman of the House Financial Services Committee.
There had been agreement between most of Congress and the Bush administration that the automakers needed help, but previously no agreement on how to do it.
Frank ended the hearing with the auto CEOs saying he sensed a growing desire to help the automakers: "The increased optimism is the flipside of some great negativism -- the jobs numbers today."
BILLIONS SOUGHT
GM and Chrysler have asked for immediate loans to forestall possible failure, while Ford is asking for a $9 billion credit line that would be tapped later if necessary. GM wants $12 billion in loans, with $4 billion of that immediately, as well as a $6 billion credit line. Chrysler wants $7 billion.
Chrysler CEO Bob Nardelli told Frank's panel that the company needs $4 billion to run operations through March. Over the same time frame, GM CEO Rick Wagoner said his company needs $10 billion to keep going.
Ford CEO Alan Mulally said again that his company does not immediately need to use federal funds.
Meanwhile, GM, Ford and Chrysler appealed to the Canadian and Ontario governments for billions of dollars in emergency loans against a backdrop of fresh layoffs at Ontario assembly plants. "We're fighting for our survival," said Reid Bigland, president and chief executive of Chrysler Canada.
Skeptics say the once mighty Detroit three have failed to cut their costs, ween themselves from gasoline guzzlers and make innovative cars consumers want to buy.
Before news that lawmakers and the White House were talking, shares of GM had closed down 3 cents, or less than 1 percent lower, at $4.08 on Friday. Ford rose 6 cents, or 2.3 percent, to end at $2.72.
Chrysler is owned by private equity firm Cerberus Capital Management.
(Editing by Tim Dobbyn)
