The Rudd Government has announced that it will set up a special $2 billion fund, starting from January 1, to keep the car dealers in Australia from going under in the already decreasing industry. The fund, according to The Age, was set up after being consulted by Australia’s biggest banks.

”The automotive industry plays a vital role in Australia’s economy, supporting many thousands of Australian jobs, and today’s announcement will support a stable and viable future for the industry, in the face of very difficult global conditions,’ Treasurer Wayne Swan said in a statement today/

This comes on top of an additional $6.2 billion pledged by the government to keep manufacturers alive. While parent companies for both Holden and Ford are also asking money from Washington, Toyota says that, though it is in better shape, its sales are decreasing.

In Washington, however, General Motors (parent company of Holden) says that it could fail within weeks if the cash infusion that they wanted – $4 billion instantly and another $4 billion in the next month – is not granted.

GM is requesting a total of US$18 billion, while Chrysler is seeking US$7 billion to avoid running out of cash and Ford has requested a US$9 billion credit line – saying it might not even use.

The money, combined with the needs from the other two of the Big Three (Ford and Chrysler), brings the total to $34 billion. Telling reporters outside, GM’s CEO Rick Wagoner said that he was “sorry to be asking for this support”.

The CEOs for the top 3 car makers were ridiculed for arriving in private jets two weeks ago for their plea. However, they have pledged to work for US$1 a year, travel to Washington by car and will provide plans on how it would survive in the current climate.

The state of the car makers are so severe, that GM and Chrysler held private discussions of a possible pre-arranged bankruptcy as a last resort to secure the bailout. However, the Big Three remain sceptical in the senators who will vote on the issue; but Senator Chris Dodd (D-CT) has said that he will work on a compromise.