The bosses of America's top three automotive firms - General Motors (GM), Ford and Chrysler - have failed in their bid to get congressional approval for a $14bn lifeline. What is going to happen next with the "US Big Three"? Why was the bail-out rejected?
The plan, which had passed the House of Representatives, stumbled in the Senate after Republican senators demanded that the powerful United Auto Workers union agree to swift wage cuts as a pre-condition for state aid. The unions rejected the proposal.
The Democrats had needed Republican help to back the bill in the Senate, as their majority in the upper chamber was fragile.
No other actions by the Congress on the car crisis are expected before the end of this year.
The newly elected Congress, which has bigger Democratic majorities, may consider action when it takes office in early January.
What is the next move for the carmakers?
General Motors and Chrysler have warned that they will run out of cash by the end of the year, with their survival under severe threat in the absence of a bail-out package. Ford has said it can survive, but may need funds later.
GM has maintained that it would be very difficult for a company of its size and complexity to start reorganising under Chapter 11 bankruptcy protection. However, they might consider this option more closely now.
In the meantime, the carmakers will probably push further for state aid, even if their chances of getting any immediate Federal help seem limited.
President-elect Barack Obama, who takes office on 20 January, has said the US auto industry should not be allowed to collapse.
Is a collapse imminent?
If the carmakers are able to put together Chapter 11 bankruptcy plans, not many things will change initially. They will be given time to renegotiate labour contracts and reorganise their businesses.
However, GM fears that people will stop buying its cars while the company is reorganising, which will further undermine its business model.
The worst scenario would be for the car companies to run out of money and simply fail.
The shock will ripple through the automakers' supply chain, hitting various businesses, from dashboard makers to steel mills to car dealers.
This could generate the loss of up to 2.5 million US jobs, in addition to the 2 million jobs that have already disappeared this year.
Why has the situation deteriorated sharply?
The Big Three claim that the global financial crisis has left them in dire straits.
The credit crunch means prospective buyers are hard to find, as it is harder for consumers to get loans while others are cutting back on big-ticket purchases to save money.
As a result, GM sales have fallen by more than 40%. Ford and Chrysler sales have fallen by a third.
Meanwhile, the financial crisis means it is also harder for the firms themselves to get credit and repay their loans.
But haven't they just restructured their businesses to save money?
Yes, they have. But the changes have coincided with a bad time for the global economy.
For example, to cut costs GM has closed factories and cut thousands of jobs, and at one time was considering a merger with Chrysler.
But the companies are all battling some continuing problems.
What problems?
First, they are burdened by what are known as "legacy costs". All three are paying for the healthcare and pension costs of hundreds of thousands of former workers, undertaken when the companies employed many more people.
Last year, GM and the other car companies agreed a deal with the United Auto Workers union to take $50bn of these costs off its books, but that doesn't kick in until 2010.
These historic costs, all linked to their past successes, are burdens their newer rivals do not have to bear.
The Big Three also appeared to have missed a trick in the 1980s and 1990s and failed to take note of the threat posed by foreign rivals like Japan's Toyota.
While these Asian firms made great inroads into the US market with smaller, more fuel-efficient cars, the American firms responded by ramping up production of bigger vehicles like SUVs and pick-up trucks.
Initially, these "gas guzzlers" proved to be popular, and they were very profitable for the companies, but in the long run they lost ground to smaller, more efficient vehicles as fuel prices surged.
Aid for US carmakers now 'urgent'
The latest bleak US unemployment figures makes helping the big three car firms even more urgent, a leading politician has warned.
GM, Ford and Chrysler bosses faced Congress for a second day of questions, but no bailout has so far been agreed.
The committee chairman, Democrat Barney Frank, warned that to do nothing "would be a disaster".
The carmakers have faced considerable opposition to their plea for a $34bn (£23bn) rescue plan.
Friday saw the latest US jobless figures, and the news that US companies axed 533,000 jobs in November, the most in 34 years. The unemployment rate rose to 6.7% from 6.5% in October.
Adding to these figures, GM said on Friday it would lay off 2,000 more workers early next year in the US, because of falling car sales.
Mr Frank said the data showed that helping the troubled car industry had become a greater priority.
"For us to do nothing, to allow bankruptcies and failures in one or three of these companies in the midst of the worst economic situation since the Great Depression, it would be an unmitigated disaster."
But he said the US was being "held hostage" by the political debate raging over how to help Detroit's carmakers.
No agreement
In a statement at the White House, President Bush said he was "concerned about the viability of the automobile companies".
"Likewise I am concerned about taxpayers' money being provided to those companies that may not survive," he said.
Broad consensus exists between Congress and the Bush administration that the carmakers need help, but officials have so far been unable to reach agreement on how to do it, with some lawmakers opposed to doing anything at all.
The White House does not want to use any of the banks' $700bn bailout, saying that this money is intended only to help stabilise the financial sector.
In his statement President Bush said he wanted Congress to act next week on a rescue plan for the car industry by modifying a $25bn fund which was set up to promote fuel-efficient technologies.
However, congressional Democrats oppose this and insist the money should come from the bank rescue fund, known as the Troubled Asset Relief Programme (TARP).
Admitting mistakes
The appearance of the three executives in Washington is the second time they have appealed to government for help - just two weeks ago Congress rejected their request for a $25bn loan.
In a show of contrition and prudence, this time the men abandoned their private jets and drove to Washington in hybrid cars.
But their sense of urgency has only heightened, with General Motors boss Rick Wagoner warning that without help the company could go under within weeks.
The chief executives of Ford and GM have even offered to work for $1 a year if Congress approves the emergency aid.
The main car workers union said it had accepted the necessity of job cuts in the industry.
United Auto Workers President, Ron Gettelfinger, told the committee "This is about survival at this point in time, there's going to be, unfortunately, losses."
The carmakers argued that the collapse of any one of them would have disastrous effects on the whole US economy.
Mr Wagoner, Ford's Alan Mulally and Chrysler boss Bob Nardelli all blamed the US recession for decimating sales and leaving their companies in desperate need of cash.
Hard-up GM to sell Suzuki stake
General Motors is selling its 3% stake in the Japanese carmaker Suzuki for $230m (£156m) to raise cash.
Suzuki said it would buy back the stake, adding that it understood GM faced a need to secure funding.
GM has reported a net loss of $2.5bn in the third quarter and has been trying to secure an emergency government loan along with its Detroit competitors.
The "Big Three" US car firms Chrysler, Ford and GM are seeking a total $25bn in federal aid.
Suzuki, which specialises in small cars, said the two companies would continue to cooperate in a number of joint projects, including developing new technologies. Their partnership started in 1981.
"We understand full well that GM faces a need to sell its shareholdings to secure funding," Suzuki said.
The US carmaker had already sold a 17% stake in Suzuki, in 2006.
US car firms companies have been hit by falling US sales and growing losses.
GM has said it would cut jobs and costs and has also suspended merger talks with Chrysler to focus on current issues.
Daimler cuts Mercedes-Benz output
Daimler is reducing the working week at its largest Mercedes-Benz factory, as it becomes the latest carmaker to trim output in the face of falling sales.
The firm's Sindelfingen factory near Stuttgart in Germany will adopt a four-day working week from 12 January until at least 31 March, said the company.
It added that there may also be some three-day weeks.
German rival BMW has already announced a longer Christmas break at its main production facility in Munich.
'Serious slump'
Daimler added that it was also considering shortening hours at its other plants in Berlin, Bremen and Dusseldorf.
Its announcement comes after the German Association of the Automotive Industry said last week that new car sales in 2009 were expected to be the worst since the country's reunification in 1990.
Fellow German carmakers Porsche and Volkswagen (VW) have also warned of a tough sales environment.
Porsche recently said it was delaying its takeover of VW due to signs of a "serious slump" in global demand.
Meanwhile, VW said the current market situation was "very challenging indeed".
Across Europe, Toyota, Ford and Honda have all already announced a cut in working days.
White House considers auto rescue
The White House says it is considering using money earmarked to rescue the US banking industry to bail out the country's struggling carmakers.
The White House said a disorderly bankruptcy in the motor industry would be a huge blow which the US economy could not withstand.
A $14bn (£9.4bn) bail-out deal for the US car industry failed to get Senate support, raising fears of job cuts.
Meanwhile General Motors said it was temporarily stopping some production.
And Honda is also to cut back output in North America.
GM, which has been pleading for an emergency government loan to avert collapse, said it would halt 30% of its North American production "in response to rapidly deteriorating market conditions".
It saw vehicle sales fall 41% in November, when overall US car sales fell 26% industry wide.
The temporary shutdowns will affect 14 US factories as well as three in Canada and three in Mexico, reducing output by 250,000 vehicles in the first three months of 2009.
"The speed and severity of the US auto market's decline has been unprecedented in recent weeks as consumers reel from the collapse of the financial markets and the resulting lack of credit for vehicle financing," it added.
'Irresponsible'
Earlier this year, the US approved a $700bn (£467bn) bail-out for the finance industry, known as the TARP programme.
It had previously been reluctant to use this money for other industries but White House spokeswoman Dana Perino said it would consider other options, including the use of the TARP program, to prevent a collapse of troubled automakers.
She added that it would be "irresponsible" to further damage the economy by allowing the Detroit car companies to fail.
"The current weakened state of the economy is such that it could not withstand a body blow like a disorderly bankruptcy in the auto industry," she added.
President-elect Barack Obama said he was disappointed that the Senate failed to act, adding that "millions of jobs rely directly or indirectly on a viable auto industry".
"My hope is that the administration and the Congress will still find a way to give the industry the temporary assistance it needs while demanding the long-term-restructuring that is absolutely required," he said.
'Devastating'
The Big Three - Chrysler, General Motors and Ford - employ 250,000 people directly, and many more indirectly, in companies making auto parts and car dealerships.
The United Automobile Workers (UAW) union on Friday warned that if a bail-out was not forthcoming, the result would be "devastating."
The union's president, Ron Gettelfinger said he was confident that there were "enough sane" people in Washington to find a solution despite the Senate's defeat of the bail out bill.
Tense and emotional
The White House had said the plan was American carmakers' "best chance to avoid a disorderly bankruptcy".
Shares fell sharply around the world after the bail-out was rejected - with carmakers among the hardest hit.
However the glimmer of hope that the government would step in to help carmakers helped the Dow Jones index pull back early losses to finish ahead.
In Asia, stocks in Toyota, Honda and Nissan all lost at least 10%.
The Republicans refused to back the bail-out after the UAW union refused to cut wages next year to bring them into line with their Japanese counterparts. UAW's current contract with the car makers expires in 2011.
"We were about three words away from a deal," said Republican Senator Bob Corker.
"We solved everything substantively and about three words keep us from reaching a conclusion."
The BBC's Andy Gallacher in Washington said it was always going to be a battle to get the US Senate to approve the $14bn bridging loan.
With a majority of just one in the Senate, the Democrats needed some Republicans to back the bill as some in their own party were expected to vote against it.
The atmosphere in the Senate was tense and at times emotional, our correspondent says, as the Democrats made last-minute pleas to get their Republican counterparts to vote in favour of helping America's biggest car domestic makers, Ford, Chrysler and General Motors.
Millions affected
The failure of the bail-out raises the prospect of huge job losses.
The Senate majority leader, Harry Reid, said he was "terribly disappointed" when it became clear the vote had collapsed, calling it "a loss for the country".
"Millions of Americans, not only the auto workers but people who sell cars, car dealerships, people who work on cars are going to be directly impacted and affected."
The deal would have given the Big Three carmakers access to emergency funding to help them cope with the sharp downturn in sales because of the global financial crisis.
General Motors and Chrysler have said they risk ruin without immediate aid. Ford says it may need funds in the future.
The bosses of the three firms had previously asked for $34bn from Congress.
They have all seen sales fall sharply this year in the US, partly reflecting an industry-wide fall, and partly because their large gas-guzzling vehicles are no longer what customers want.