Why Not the Auto Industry?

Congress approved a $700 billion bail out plan for Wall Street but refused to approve a $14 billion bail out request from the auto industry. Why?

A hit on Wall Street is a hit at the very pocketbooks of congressmen and senators, while a hit on the auto industry isn't a direct hit for Congress. Could it be self-interest? What's the big difference between a collapse at Wall Street and a collapse in Detroit?

Here's an excerpt of a news report from BBC:

White House considers auto rescue

The White House says it is considering using money earmarked to rescue the US banking industry to bail out the country's struggling carmakers.

A $14bn (£9.4bn) bail-out deal for the US car industry failed to get Senate support, raising fears of job cuts and a possible industry collapse.

The White House said that the US economy could not withstand a body blow like the collapse of the auto industry.

Meanwhile General Motors said it was temporarily stopping some production.

And Honda is also to cut back output in North America.

GM, which has been pleading for an emergency government loan to avert collapse, said it would halt 30% of its North American production "in response to rapidly deteriorating market conditions".

It saw vehicle sales fall 41% in November, when overall US car sales fell 26% industry wide.

The temporary shutdowns will affect 14 US factories as well as three in Canada and three in Mexico, reducing output by 250,000 vehicles in the first three months of 2009.

"The speed and severity of the US auto market's decline has been unprecedented in recent weeks as consumers reel from the collapse of the financial markets and the resulting lack of credit for vehicle financing," it added.

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