General Motors was dealt another blow on Wednesday with its financing arm GMAC failing to meet the capital requirements to become a bank holding company. As a consequence, the firm will not be able to tap funding from the Treasury, one of GM's major efforts for remaining afloat.

All eyes now turn to Washington, which has reached an agreement in principle with the White House for an auto bailout package that would grant Ford, GM and Chrysler $15 billion in immediate financing with the groundwork for longer term loans. Overall, the Big Three have requested $35 billion.

According to the Wall Street Journal on Wednesday, the House is likely to pass the package without too much difficulty, though the slim Democratic majority in the Senate means lawmakers will have to convince between 13 and 15 Republicans to vote for the bill.

The bill could reach the floor of the House for a vote as early as Wednesday afternoon with the Senate expected to follow suit soon after.

At 8:40 a.m. EST, GM shares were down 4.26% while Ford shares were up 4.02% in pre-market trading.

By Erik Kevin Franco and edited by Stephen Huebl
©CEP News Ltd. 2008