Sen Shelby: Opposes Bailing Out Big Three Auto Makers ~ December 04, 2008: 10:54 AM EST

WASHINGTON -(Dow Jones)- Sen. Richard Shelby, R-Ala., the senior Republican on the Senate Banking Committee, said Thursday he would oppose any federal government assistance to the U.S. auto makers.

Shelby, a key critic of the financial sector assistance plan agreed to by Congress in October, said at a hearing of the panel, that his skepticism of that plan had been vindicated.

He queried what would be different if the federal government now decided to extend similar aid to the auto sector as it has done to banks and other weakened financial firms.

Posing a series of questions in his opening remarks to a hearing looking at whether the government should provide assistance, Shelby said any taxpayer aid to the General Motors Corp. (GM), Ford Motor Co. (F) and Chrysler LLC could be simply "propping up a failed industry for a few months."

He noted that in just two weeks, the requests for financial relief by the companies had jumped from $25 billion to $34 billion.

Shelby said he believed the plans submitted by the companies were based on " optimistic sales forecasts," and he said he would be looking to the executives of the companies to provide assurances they were prepared for the unexpected.

-By Corey Boles and Josh Mitchell, Dow Jones Newswires; 202-862-6601; corey.boles@dowjones.com

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