Senate rejects bail-out for US carmakers

The United States Senate has rejected the plans to bail-out the big three carmakers. The news broke late on Thursday, causing GM, Ford and Chrysler’s shares to tumble in response.The House of Representatives and the White House had initially approve a $14bn rescue plan for the troubled US car manufacturers but the plans needed to be approved by the Senate and signed off by the President.

GM’s shares plunged by 28 per cent to €2.28 and Ford’s fell by 18 per cent to €1.86 in Frankfurt while shares of Daimler, which owns 19.9 per cent of Chrysler, were down 7.4 per cent this morning, the Financial Times reports.

Meanwhile the BBC reported yesterday that the Swedish government had announced a 28 billion kronor (£2.3 bn) bail out for Volvo and Saab.

Both Swedish manufacturers faced the possible sell off from their struggling parent companies. Volvo is owned by Ford, while Saab is owned by General Motors. The Swedish government initially said it would await a US decision on a rescue package before announcing its own measures although it repeated the message that it would not be taking over the companies.

Meanwhile GM-owned Vauxhall who employ around 5,500 people in the UK is seeking a hand-out from the British government.