Bush still considering loans to automakers

The White House tossed out no lifeline for the teetering auto industry Sunday, though President Bush reiterated that he was considering using money from the $700-billion financial bailout fund to provide loans to the carmakers.

“An abrupt bankruptcy for autos could be devastating for the economy,” Bush told reporters today aboard Air Force One during an unannounced trip to Iraq and Afghanistan. “We’re now in the process of working with the stakeholders on a way forward. We’re not quite ready to announce that yet.”

Bush wouldn’t give a timetable but said: “This will not be a long process because of the economic fragility of the autos.”

White House officials said they did not expect to make an announcement today. The administration is considering ways to provide emergency aid to General Motors Corp. and Chrysler, which have said they could run out of cash within weeks without federal aid.

Sen. Bob Corker (R-Tenn.), who blocked legislation that would have provided $14 billion in loans to the automakers, said he had spoken with the White House early Sunday.

“I don’t think they yet know what they’re going to do,” he said.

Discussions involve potential conditions and the amount of funding for GM and Chrysler. Ford Motor Co. has said it has enough cash to survive 2009 but asked Congress for a line of credit in case financial markets deteriorate further.

Last week, Congress failed to approve a plan that would have provided short-term financing to the industry and create a “car czar” who would ensure that the money would transform the Detroit automakers into competitive companies.

After the legislative defeat, the administration said it was considering several options, including using money from the $700-billion financial bailout fund to provide loans to the carmakers.