Automakers May Get TARP Aid

Updated from 11:31 a.m. EST

The White House says it is willing to provide troubled automakers with bailout money from a package intended to help banks and Wall Street, creating an unusual alliance between the United Auto Workers and a Republican president battling members of his own party.

The shift came after the Senate failed Thursday night to pass legislation providing $14 billion for Chrysler and General Motors(GM), which needs immediate help to avoid a liquidity crisis. GM said Friday it will cut first quarter production by 30% or 250,000 vehicles "due to the ongoing and severe drop in industry sales."

Optimism mounted Friday that money will indeed be forthcoming from the Troubled Asset Relief Program, the $700 billion package approved by Congress in October. "Given the current weakened state of the U.S. economy, we will consider other options if necessary -- including use of the TARP program -- to prevent a collapse of troubled automakers," the White House said Friday, in a prepared statement.

The White House "wanted to get this thing worked out," UAW President Ron Gettelfinger said Friday at a press conference. "They did not want to pass it off to the next administration. The Republican minority decided they wanted to go against their own president."

Timing is critical, Gettelfinger said, because suppliers are "shortening their terms," and seeking cash on delivery at General Motors.

"We need to get the commitment" on bailout funding, he said. "We need to satisfy the suppliers that there is to be no tomorrow. The run on the banks is a bigger issue than anyone here realizes."