The $14 billion U.S. emergency bailout of the Detroit-based automakers failed to pass the senate vote, Thursday night, after a failed deal with the United Auto Workers’ union’s on the topic of accept wage cuts.

Democrats and Republicans worked together to develop the bill, which would provide access to a limited section of the $700 billion dollar Wall Street emergency fund to the quickly failing automotive industry in an effort to aid solvency.

The Republicans, who currently control the Senate, however, wanting to maintain their mostly non-interventionist and trickle-down appearance, demanded the United Auto Workers accept a provision in the deal which would require steep wage cuts prior to 2009 to equilibrate compensation in a range more like that of the Japanese counterparts.

This corresponds with the common right-wing wisdom that the failure of the American automotive industry is resultant of the power the union wields in terms of benefits and total compensation received, a number which, when including value of employee benefits, is oft cited to be more than double that of the Asian employees.

General Motors and Chrysler claim they could be within a week of default. The Wall Street Journal is reporting that General Motors is currently seeking legal counsel on bankruptcy protection in what could be one of the largest bankruptcies in history.

“The GM board of directors has discussed bankruptcy, but when it has done so has not concluded that it was a viable solution to the company’s liquidity problems[.] The board is meeting frequently and monitoring the situation very closely and is committed to considering all options - as is management - and has engaged appropriate advisors for all contingencies,” said General Motors in a press release.

The timeline for another congressional action bill to be managed may already be too long to save GM without an emergency action.

U.S crude oil prices sit at just over $46 a barrel, a fall of nearly $2. Stock markets in the East have progressed the day falling quite sharply, it’s expected that U.S. and Canadian markets will do the same when they open early tomorrow.

Ford Motors says they are not currently facing default or any short-term solvency issues.

The bailout, if passed, would have created a series of conditions for the companies to force innovation, restructuring and better business practices to return to profitability. One of the requirements required by Republican legislators took the form of wage adjustment.

In an almost unprecedented move in socializing U.S. business, the bill also called for the creation of an oversight body to monitor the progress and restructuring of the loan recipients’, which was to be headed by a presidential appointed leader.

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