Following the call by Michigan members of congress for the government to support a multi-billion dollar aid package for the auto industry, Senate Democrats have approved a $6 billion package to secure low-interest loans for the Detroit Three.

The package will be financed by Congress for $900 million, in order to guarantee the $6 billion in loans, and Congress may consider further stimulus packages later this year.

If the entire $25 billion package were to be approved it would cost Congress a total of $3.75 billion - which will provide $25 billion in loan guarantees for auto makers who are retooling plants in order to respond to strict new government CAFE standards and changing consumer demand.

In addition to the $6 billion loan guarantee package, Senate Democrats have also agreed to put up $300 million in funding for research into an advanced battery.

The battery fund is designed to speed up the roll out of more practical and efficient batteries in order to hasten the popularity of the electric car.

While previously the government has been reluctant to participate in bailout schemes for private companies, their current attitude recognizes the difficulties that manufacturers face in attempting to adhere to new fuel efficiency standards and the cost involved in implementing this across an entire product range.