Auto Industry Bail-Out Fails, Stocks Expected to Plummet Friday

The proposed $14 billion emergency bailout for the "Big Three" U.S. automakers fell apart in the Senate Thursday evening, with the blame being placed on the United Auto Workers union who refused to comply with Republican demands for immediate wage cuts. The UAW was willing to make cuts, but not until 2011.

Senate majority leader Harry Reid said he was "terribly disappointed" over the death of the potential bipartisan deal to rescue the nation's top automakers. Reid also said that the bill's collapse was a "loss for the country", adding "I dread looking at Wall Street tomorrow. It's not going to be a pleasant sight."

Bailout hopes fell apart following marathon sessions of talks at the Capital amongst the auto industry, labor, and lawmakers who bargained throughout the day and night in an attempt to salvage the American auto industry during a time of soaring job losses and widespread economic problems.

Sen. Chris Dodd (D-Conn), the Banking Committee chairman who headed up negotiations on the package, said "In the midst of already deep and troubling economic times, we are about to add to that by walking away."

Sen. Bob Corker (R-Tenn) who headed up the GOP side in the talks, said that the two sides were extremely close to a deal. However, Corker said that the UAW's refusal to agree to wage concessions by a specific day in 2009 is what kept the deal from happening. The UAW contract doesn't expire until 2011, which is when the UAW agreed to institute wage reductions.

The defeat is somewhat reminiscent of the $700 billion bailout package for the financial sector, which failed in the House and sent Wall Street tumbling while lawmakers scrambled to work out a deal. A deal was eventually worked out, but not before more companies went down, retirement accounts took a beating, and the stock market suffered.

Tomorrow won't be pretty. At this point Ford, GM, Chrysler,and the rest of the country need to pray for a miracle.