Calls for General Motors chief Rick Wagoner to step down intensified at the weekend as Congress considered a $15bn loan package to help the beleaguered Detroit Big Three automakers.

Democrat insiders told Agence France-Presse (AFP) a deal was imminent after a weekend of negotiations with The White House on a short-term loan package while Republicans warned that a tough debate awaited the proposed bill this week.

“Discussions are continuing. Modifications are being made to the draft,” a House Democratic aide told AFP, speaking on condition of anonymity.

“A provision prohibiting lawsuits by automakers against states will be included in this draft,” a measure likely to be opposed by the White House, the aide added.

AFP noted that congressional aides had said the deal would amount to a short-term loan for the automakers to get them through to the end of the first quarter, after president-elect Barack Obama takes office on January 20.

Obama reportedly urged the car chiefs to change their ways or quit, but stressed that bankruptcy was not an option.

“If this management team that’s currently in place doesn’t understand the urgency of the situation and is not willing to make the tough choices and adapt to these new circumstances, then they should go,” Obama told a press conference in Chicago on Sunday, AFP said.

New York Times columnist Thomas Friedman said on the CBS Sunday morning Face the Nation politics talk show that any taxpayer loan must be conditional on a business plan that halts Detroit’s ruinous practices of building cars people do not want to buy.

As future shareholders of General Motors, American taxpayers should not allow the management that “drove this company into a ditch” to stay on, hoping that the same management will be able to drive it back out, he said.

Asked if installing new management should be a bail-out condition, Connecticut senator and chairman of the Senate Banking Committee, Chris Dodd, said: “I think it’s going to have to be part of it. And there are different positions. I think it’s clear GM is in the worst shape. Chrysler is, I think, basically gone, probably ought to be merged.

“Ford is fairly healthy. So we don’t want to brand all of these companies exactly the same way. But nonetheless, if you’re going to restructure and have a viable manufacturing sector in our country, then… I think [Wagoner] has to move on.”

A GM spokesman told The New York Times the company was grateful for Dodd’s assistance and that it was willing to accept tough oversight, but that it retained confidence in Wagoner.

“We appreciate Senator Dodd’s support in trying to provide some assistance for the industry, but General Motors’ employees, dealers, suppliers and the GM board of directors feel strongly that Rick Wagoner is the right person to continue the transformation of the company that he began and has presented plans to Congress to continue and accelerate,” he added.

Senator Richard Shelby told Fox News the rescue plan was a “bridge loan to nowhere,” adding that the unionised automakers had grown unwieldy and needed downsizing.

“These companies basically have failed,” Shelby, the top Republican on the Senate Banking Committee, said. “They probably need, according to some people, about 60% of the management to go, and about a 40% downsize of the workers.”

Senator Jeff Sessions of the Senate Budget Committee said $15bn from money that had already been appropriated was better than the extra $34bn the automakers asked for on Capitol Hill last week.

“So I think the chances of passage are better,” he told Face the Nation host Bob Schieffer. “But I do believe that we haven’t had the kind of integrity in this request that’s necessary.

“I truly believe these companies would be better off if they sought [Chapter 11] reorganisation, like so many corporations have done. These would be proceedings under oath. They could relieve themselves of these legacy costs and other unnecessary expenses, come out leaner and more vibrant and be successful. This is the best way to save jobs.”

Friedman said blame must be shared by lawmakers who protected the Big Three’s interests over the years – “protecting them to death,” in a way – by blocking pressures to build more fuel-efficient, safer cars, and thus making them less competitive on the world market.

“These are people, remember, who opposed seat belts, rearview mirrors, just about any innovation you could think of,” Friedman told Schieffer. “So we need a real change of thinking here.

“GM can only do two things today really well. They can lobby Congress, and they can advertise at the Super Bowl. That’s about it.”

Friedman said that Detroit was self-conditioned to make money from big cars, like SUVs, Hummers and trucks.

“A couple of years ago, as gasoline prices rose, what was their response? Was it to move immediately to electric cars or more efficient cars? No, they came out with a programme for $1.99 a gallon gas for a year if you bought a Hummer or a Yukon or a Suburban.

“It was like a crack dealer saying, ‘I’m going to guarantee you free crack, or reduced crack for a year.’ It wasn’t ‘I’m going to get you off your addiction.’ “

Friedman also said Detroit’s proficiency at lobbying was against their long-term best interests, as when they opposed then First Lady Hillary Clinton’s national health care programme. Yet now the automakers were burdened with the costs of health coverage for their workers and retirees.

“Now they tell us, ‘Oh, it’s terrible, we’ve got these health care costs, woe is me!’ But were they out there campaigning for a national health care plan that they would have been the biggest beneficiaries of? No, they were brain-dead,” Friedman added.

“If we are going to save them, then I want new management and I want to see a real plan for their survival,” he added.

He said MP3 players, computer programmes, Napster and iPods changed the way music was generated, distributed and consumed, forcing an entire industry to adapt, and said Detroit must adapt to advancing auto technologies as well.

“If we give money to these people and it is not with a plan to take advantage of this revolution, it would be, as if, today, we said, ‘Let’s give money to make RCA Victor record players in the world of iPods,’ OK?”

Dodd also said he would even consider a federally-appointed ‘car czar’ to oversee the Big Three. Some reports said the successful former General Electric boss Jack Welch had been mentioned as a contender for the role.

Dodd added he believed a short-term loan package to Detroit would pass, even among those in Congress who don’t like the idea. “None of us want to wake up on 1 January and discover we don’t have an industry to save,” he said.

But Sessions doubted a short-term rescue plan would pass.

“I think Congress is tired of being stampeded, they’re tired of being threatened that we’ve got to pass something [with] just a few days of voting or consideration. We haven’t even seen a bill yet. So I think there’s still a lot of scepticism out there, and I have my doubts that it would pass until we have an opportunity to really see what this is about. But it’s a lot closer than it was with them waltzing in and going from $25bn to $34bn, pretending to be humble.”

The New York Times said the final legislation was expected to impose stringent taxpayer protections, including stock warrants that would give the government an equity stake in the three companies, new limits on executive pay and a ban on stock dividends while the loans are outstanding. One proposal would require the auto companies to seek government approval for any business transaction of $25m or more.

Once a bill offering aid to the industry is completed by Congressional Democrats and the White House, it would still need the approval of some senate Republicans, the NYT added, noting that Michigan Republican senatot Carl Levin, one of the auto industry’s biggest supporters, had said on Sunday it was uncertain whether the plan would win the 60 votes needed to advance in the senate.

Sessions told CBS he didn’t like the idea of a federal government auto industry supervisor.

“I am uneasy about the federal government telling these companies what they’ve got to do to be successful. They’re the experts at it, not the federal government.”

He also said on the programme that Congress was having “buyer’s remorse” over its handing over of the bailout package to Treasury Secretary Henry Paulson.

“The idea that this senate, in a panic mode before the election, would give one man $700bn to allocate amongst his friends on Wall Street as he chooses, with virtually no oversight whatsoever, is just breathtaking to me. And I think we’re having some buyer’s remorse on that.”