DETROIT - SHARES of General Motors and Ford Motor tumbled on Wednesday as mounting political opposition cast doubt over a proposed US$25 billion (S$38 billion) government bailout for the US automakers.

Shares of GM dropped more than 15 per cent to a 66-year low, while Ford shares tumbled 23 per cent to their lowest level in 26 years.

GM launches 'product offensive' in China: state media SHANGHAI - US AUTOMAKER General Motors has unveiled an 'unprecedented' number of new models in China, where it has gone on the offensive as it faces bankruptcy at home, state media reported on Thursday. GM and its local partners are trying to keep an edge in China, the world's second largest market after the United States, as they exhibit 24 models at this week's Guangzhou International Auto Show, the China Daily said. ... more

The stocks extended declines after the chairman of the US Senate Banking Committee said it looks unlikely Congress will come to agreement this week on an assistance package for the struggling US auto industry.

'I'm anxious to see something happen,' Connecticut Democrat Christopher Dodd told reporters. 'But frankly, the idea that there's going to be a bill, I think, is remote.'

US auto executives headed to Capitol Hill for a second day to argue their case for the aid package which they say is imperative for the industry to survive.

Barclays Capital analyst Brian Johnson said the prospect of a compromise between lawmakers remains 'elusive' before a potential Senate vote this week.

'Assuming defeat, GM would have to 'run on fumes' until the next Congress and administration, unless Congress were to reconvene in December to address emergency compromise legislation,' Mr Johnson said in a research note.

Democrats have proposed a US$25 billion bailout for the ailing automakers, on top of the US$25 billion in federal loans already approved by Congress to help the industry retool plants and meet new fuel economy mandates.

The proposal has faced stiff opposition from critics including Republicans and government officials, who have questioned whether Detroit automakers would be healthy enough to repay any loans and have remained resistant to spending yet more taxpayer money on corporate rescues.

Republicans and the White House favour a plan to tap the already approved US$25 billion in auto retooling loans.

JPMorgan analyst Himanshu Patel said that federal aid is more likely than not, but added it is 'clearer now' that the timing of any such aid is not imminent.

GM shares were down 48 cents, to US$2.61, the lowest since 1942. Ford shares were down 39 cents to US$1.29, hitting a 26-year low. -- REUTERS