US President-elect Barack Obama has said the US auto industry was too vital to disappear but vowed there would be no blank cheque from the government.
"Taxpayers can't be expected to pony up more money for an auto industry resistant to change and I was surprised that they did not have a better thought-out proposal," Mr Obama said of a request the big three automakers made last week for $US25 billion ($38.4 billion) in government-backed loans.
Chrysler, GM and Ford warned the US Congress last week that the country's domestic auto industry faced a "catastrophic collapse" which would lead to the loss of millions of jobs if lawmakers did not help them weather the sharp economic downturn with "bridge" loans.
However, they were sent away empty-handed and told to return by early December with more detailed proposals for long-term recovery in return for government cash.
Mr Obama acknowledged the economic significance of the auto industry, calling it the "backbone of America's manufacturing base", but cautioned that significant reform would be expected in exchange for government help.
The auto giants said their problems were not of their making, arguing they had been hit by falling demand amid the financial crisis just as years of painful restructuring was beginning to bear fruit.
GM has warned it could run out of cash as early as January without "immediate" help and analysts say a bankruptcy filing would likely result in a liquidation of the world's second largest automaker rather than a court-supervised restructuring.
Ford and Chrysler are also burning through cash with auto sales plummeting 40 per cent in October to levels not seen in a quarter of a century as credit dried up for loans and the financial crisis shattered consumer confidence.
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