U.S. Senate blocks auto rescue

Car makers in the United States face further gloom as the Senate fails to approve emergency bailout measures.

Detroit won't get its bailout, as the U.S. Senate blocked the measure to rescue America's big three car makers.

General Motors and Chrysler are seeking billions of dollars in immediate aid, while Ford wants a hefty line of credit.

Republicans insisted the unions accept a pay cut next year - which they didn't - and it was disastrous news for the Democrats who were pushing for the measure:

(SOUNDBITE) (English) SENATOR CHRISTOPHER DODD, DEMOCRAT, BANKING COMMITTEE CHAIRMAN, SAYING:

"This will fail, we will all go home. And I'm afraid our country is going to be in deeper, deeper trouble."

(SOUNDBITE) (English) SENATOR HARRY REID, DEMOCRAT, MAJORITY LEADER, SAYING:

"I dread looking at Wall Street tomorrow."

The news came out after American financial markets closed, but markets across the Asia-Pacific region fell more than 3 percent on the development, with Japan's Nikkei average and Hong Kong's Hang Seng both down more than 5 percent.

European and U.S. stocks were expected to fall about 5 percent.

The car makers have been in trouble for years, offering lacklustre models to a now declining market.

Benet Allen, Reuters