Barack Obama used yesterday's Oval Office meeting with President Bush to press for immediate aid for the struggling US car industry, according to leaked reports.

Mr Bush said that he could support some aid in exchange for approval of a free-trade agreement with Colombia – but there was no sign that either the President-elect or his Democratic colleagues were willing to bend on that issue.

Senior Democrats asked the Administration at the weekend to consider expanding the $700 billion bank bailout package to include assistance for car companies struggling under a legacy of debt and falling sales.

Mr Obama's spokesman, Robert Gibbs, said yesterday that the plight of automakers was one of a number of issues discussed in a two-hour meeting with Mr Bush to discuss the transfer of power at a time of war and financial crisis. Other issues included housing, mortgage foreclosures, and, more generally, "the need to get the economy back on track".

The parlous state of the American car industry was highlighted last Friday when General Motors – the biggest US car manufacturer – reported a $2.5 billion net loss for the third quarter, bringing its total losses to nearly $57 billion since the beginning of 2005.

Ford Motor Company’s $129 million quarterly loss, meanwhile, brought to nearly $24.5 billion the deficit it has run up since plunging into the red in 2006. The privately-held Chrysler LLC is also thought to be fast running out of cash – one reason, analysts believe, why its parent, Cerberus Capital Management, was so eager to sell Chrysler to General Motors.

The New York Times, citing unnamed people familiar with the discussion, said that Mr Obama went into his post-election meeting with Mr Bush primed to urge him to support emergency aid for the car industry.

The Bush Administration is reluctant to give carmakers access to the bailout fund, even though the Democrats say it could legally do so.

Linking the issue with the Colombia free trade deal could delay any move until after Mr Obama's inauguration on January 20. US union leaders oppose the agreement because of numerous murders of trade unionists in Colombia at the hands of right-wing paramilitary squads closely linked to the Colombian armed forces.

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