Obama expected to help car makers

Washington - The White House on Tuesday declined to confirm reports that president-elect Barack Obama had pressed US President George W. Bush to provide immediate aid to beleaguered big US automakers.

Spokesperson Tony Fratto said Bush's conversation with Obama during a one-hour meeting in the Oval Office on Monday would remain private. Obama has pledged to help the auto industry, calling it the "backbone" of US manufacturing.

And Democratic leaders of the US Congress called Saturday for funds contained in a $700bn federal rescue plan for the financial sector to be diverted to the struggling auto industry.

Fratto seemed to rebuff that appeal, declaring "our position hasn't changed," and noting that US lawmakers had already created a loan program "specifically designed to assist automakers".

In a joint letter from Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi made public on Saturday, they urged Treasury Secretary Henry Paulson to use his powers under the Emergency Economic Stabilisation Act (EESA) passed to combat the financial crisis.

The act authorised $700bn in funding and granted Paulson broad powers to purchase financial instruments to restore financial market stability, $250bn of which has ben pledged to buy stakes in US banks.

"If Congress intends to consider legislation to accelerate funds they've already appropriated, we'll listen to their ideas - as long as funding will continue to go to viable firms and with strong taxpayer protections," said Fratto.

The biggest US automaker General Motors warned Friday that it would run out of cash in the first half of next year and fellow Detroit giants Ford and Chrysler are also in crisis.

- Sapa-AFP