DETROIT (AP) -- Shares of U.S. automakers surged sharply in premarket trading Monday as Congress appears to be leaning closer to throwing the companies a financial lifeline, but attached to a potential aid package are growing calls -- including from a key senator -- for the chief executives to step down.
General Motors rose nearly 22 percent, while Ford gained nearly 18 percent.
Sen. Chris Dodd, D- Conn., chairman of the Banking Committee said Monday on ABC's "Good Morning America" that overhauling the top management of Ford, Chrysler LLC and GM is necessary as a gesture of good faith with the American public.
Several analysts are speculating that GM, and Chrysler and Ford will receive the funding, but with additional strings attached. Key Banc analyst Brett D. Hoselton said in a research note Monday that there's a 50 percent chance the federal government will grant aid, providing Senate Republicans get onboard.
Although details of a bailout plan are still being hammered out, parts of the plan include a Cabinet-level oversight board, along with a provision to withdraw the money if overseers decide the automakers are not doing enough to overhaul operations.
The emergency funding would come from existing programs originally designed to aid the automakers in building more fuel-efficient cars. According to an Congressional aide, the size of the package is expected to be about $15 billion, falling short of the $34 billion the companies requested.
J.P. Morgan analyst Himanshu Patel wrote that there are other options should the Congressional plan fail.
"The government would guarantee bank loans made to the auto sector provided by banks that receive TARP funds," he said. "If all other options fail, we suspect the Bush administration would in the end agree to release a minimal amount of TARP funding to carry the carmakers over to the Obama administration."
GM shares jumped 88 cents to $4.96, while Ford increased 48 cents to $3.20.