The accord is designed to provide short-term loans to General Motors, Ford and Chrysler to prevent an industry collapse and allow a comprehensive restructuring of the companies early next year, House Speaker Nancy Pelosi said in a statement.
Pelosi also revealed that she was willing to fund the bailout with part of the $25 billion package already approved by the Bush administration to help accelerate development of more fuel-efficient vehicles. Pelosi, along with Senate Majority Leader Harry Reid, had previously opposed such a plan, reports Automotive News.
Under the latest agreement, Pelosi said she would demand "a guarantee that those funds would be replenished in a matter of weeks" and that the carmakers promise not to delay work on improving fleet wide fuel economy levels.
The loans would allow the Detroit 3 to maintain operations until President-elect Barack Obama takes office on January 20.
Ford CEO Alan Mulally said his company doesn't immediately need loans but is supporting GM and Chrysler to prevent a snowball effect of bankrupt suppliers, in which case it would then need about $9 billion to stay afloat. Chrysler CEO Bob Nardelli said his company needs about $4 billion to survive until the end of the year, while GM boss Rick Wagon said his firm would need about $4 billion by January and up to $10 billion through March.