Dec. 10 (Bloomberg) -- The House approved a $14 billion loan package intended to prevent a collapse of domestic automakers that would threaten millions of U.S. jobs. The 237-170 vote sends the measure to the Senate, where opposition is growing.

Tonight’s action could be a lifeline to General Motors Corp. and Chrysler LLC, which said they would run out of cash by early next year. The Bush administration and Democratic leaders in Congress backed the measure, which they said would force the automakers to restructure to achieve financial viability or repay the loans.

“It’s tough love for an industry whose success is essential to our economic success,” said House Speaker Nancy Pelosi. The measure was supported by 205 Democrats and 32 Republicans.

The U.S. may end up holding a large stake in the automakers, based on the provision that requires the companies to give the government a warrant equal to 20 percent of the value of the loan, either in some from of equity or an equivalent “economic instrument.” GM, with a market value of about $2.8 billion, is seeking $10 billion to survive until March 31.

GM’s value has fallen 89 percent since the last peak in October 2007.

Plans

The legislation calls for the appointment of a so-called car czar to loan money to the automakers while requiring them to submit long-term plans on how they will return to financial viability. The czar could provide additional financial help to implement a company plan, or order repayment of a loan if the plan is inadequate.

The czar, who would be appointed by the president, could force the companies into bankruptcy unless they come up with a restructuring plan by March 31.

The measure would give the car czar power to veto automaker expenditures over $100 million. Car companies that take loans would have to limit pay and ban bonuses for their 25 most highly paid executives. They also would be barred from owning or leasing passenger aircraft or paying dividends to shareholders.

Some Republicans said the measure would waste taxpayer money without saving the companies from collapse. The bailout “won’t save a single job,” said Representative David Dreier, a California Republican.

The House approved an amendment that would require financial institutions that receive money from the $700 billion Troubled Asset Relief Program to report any change in lending.

In the Senate, Republicans said the bill lacked the 60 votes needed to overcome delaying tactics threatened by some members. Democrats have a 50-49 edge in the Senate.

‘Respond to Concerns’

“I don’t think the votes are there on our side of the aisle, and I think that some effort needs to be made to respond to some of the concerns of my colleagues,” said Senator George Voinovich of Ohio after meeting with fellow Republicans.

Some lawmakers pushed for changes in the role of the czar. Senator Robert Bennett, a Utah Republican, said the czar wouldn’t have enough authority and should have the power to create a “de facto” bankruptcy.

“The creation of the car czar is absolutely essential,” Bennett said. “If you just put money in and you don’t have a de facto structured bankruptcy, you’re in real trouble.”

Lawmakers can continue working on the package into next week if necessary to make the changes, said Republican Senators Christopher Bond of Missouri and Tom Coburn of Oklahoma.

“There are some changes that would be beneficial that might help us bring enough votes to get the 60 votes needed to pass it,” Bond told reporters.

Senate Democrat Max Baucus of Montana, chairman of the Finance Committee, said he will vote against the legislation because it includes a tax provision benefiting transit agencies.

To contact the reporters on this story: John Hughes in Washington at Jhughes5@bloomberg.net

Last Updated: December 10, 2008 22:32 EST