US carmakers' rescue set to be steered through Congress

Congress is expected to vote through a $15 billion (£10.1 billion) rescue plan for America's struggling carmakers.

The bailout could keep General Motors and Chrysler operating at least until president-elect Barack Obama's inauguration. But the US Senate may still block the rescue plan. Ford would also be eligible to apply for support, but has said it does not need to at present.

GM and Chrysler have said they need $14 billion to stay afloat until early next year. Democrats and the Bush administration finally hammered out an agreement on the bailout amid growing calls for the scalp of GM chief Rick Wagoner.

The firm has asked its white-collar employees to sign a petition of support for the embattled Wagoner, who has faced down threats to his job.Senator Christopher Dodd, a Connecticut Democrat, is the latest to call for him to step aside as part of the rescue package the industry is seeking from the taxpayer.

Even if Wagoner stays at the helm, Congress is set to demand major restructuring of the two firms before it extends any help.

A senior administration official said the White House reached an agreement in concept with lawmakers but negotiations on details were continuing.

The legislation is expected to include protections for taxpayer money, including the appointment of a "car czar", who could force the firms into Chapter 11 bankruptcy protection if they do not come up with a business plan by March.

The car czar has until then to negotiate with the companies and stakeholders over a plan that satisfies the definition of long-term viability as set out in the legislation.

The czar, who would be appointed by President Bush, would be required to call in the loan if a strategy is not agreed by the deadline.

Negotiations have centred on avoiding a situation in which more loans are needed down the road for an industry that has shown reluctance to make fundamental changes.