As U.S. lawmakers postponed voting on a US$25-billion lifeline for the endangered auto sector until December, Canada's Industry Minister Tony Clement convened with top-level officials in Washington on a fact-finding mission about how to best deal with the crisis.

Clement, who was joined in Washington by Ontario's top economic minister Michael Bryant, said the need for a new business model is urgent given current global economic problems.

"We came here to Washington to get an accurate picture of the situation and to see what automakers and our American counterparts are proposing for the industry," he said.

"The companies and the unions need to come up with a plan for the industry's long-term success ... no one wants to be back to where we are today one year from now."

Clement's comments come as groups of both Democratic and Republican senators came up with a compromise plan Thursday to bail out the Detroit auto makers.

The new proposal would temporarily divert money from a fuel-efficiency loan program, passing on the funds to the three big American automakers.

"We believe that there's a reasonable chance that if this were put to a vote today or tomorrow, that it would get the 60 votes necessary," said Carl Levin, a Democratic Senator from Michigan.

But the proposal likely won't head for an official vote until December.

"Obviously, we're disappointed that we're not going to act today," said Levin, adding that quick action was needed to avoid "disastrous results."

Earlier this week, the leaders of General Motors Corp., Ford Motor Co. and Chrysler warned they face a precarious economic situation. They added that the collapse of the auto industry would mean millions of lost jobs.

Fact-finding mission

Clement and Bryant travelled to Washington to find out what actions U.S. lawmakers are taking in order to find out what Ottawa may do to help auto makers here.

According to Bryant, officials in Washington were quick to point out that Canada and the U.S. are "all in this together" and should work together to solve the problems.

The Globe and Mail reported Thursday that Chrysler Canada said it needs a $1 billion lifeline in order to stay in business.

The request would make Chrysler the first Canadian arm of the Detroit Three automakers to ask for a specific amount of funding.

The request was put to Ottawa and Ontario, but there were few details about what form Chrysler would like the assistance to take or how it would break down between the two levels of government.

Chrysler, along with Ford and General Motors, are all seeking loans or loan guarantees to get credit flowing again amid a shifting North American auto market and tough economic times.

In the speech from the throne on Wednesday the federal government indicated there would be more support for the auto industry, but there were no details about how that would roll out.

Don Drummond, chief economist for TD Bank, told CTV's Canada AM that an auto bailout is the best option for Ottawa and Queen's Park.

He said the failure of one of the automakers' Canadian operations would be devastating to the economy, flooding the job market with skilled workers with no place to go.

He pointed out the auto industry contributes a minimum of 5 per cent of Ontario's gross domestic product, and there would be reverberations across Canada.

"I think you're stuck, you have to give a lifeline," Drummond said.

"We have to preserve the value and the skilled labour in there, that's just too much of a knock-on effect to come to the rest of the economy cold turkey," Drummond said.

Ken Lewenza, president of the Canadian Auto Workers, has added his voice to the chorus of those calling for government assistance for the industry.

He told Canada AM that government funding would represent an "investment in the economy" rather than a bailout, and would result in a return on the investment.

He maintained his position that the union has already made great sacrifices to help the industry -- giving up almost $1 billion in cuts over the next three years.

"Last May we recognized that we were getting into some serious problems with the rise of the Canadian dollar, with the market share declining. So we went to the corporations in advance of anybody and said what can we do as an organization to put ourselves on solid footing?

"As a result of that the Big 3 will save $900 million of savings that we were able to generate through the last set of negotiations. So we were proactive."

With files from The Canadian Press