By John Crawley and Richard Cowan

December 12, Reuters

WASHINGTON (Reuters) - A proposed bailout of U.S. automakers failed in the Senate on Thursday night, raising the specter of an industry collapse that sent Asian markets reeling and sparked fears it could deepen the recession.

"It's over with," Senate Majority Leader Harry Reid said of congressional efforts this year just before the Democratic proposal to extend up to $14 billion to the stricken industry fell short of the needed votes on a procedural motion.

Pressure immediately shifted to the White House, with calls for President George W. Bush to consider intervening with emergency financing.

General Motors Corp and Chrysler LLC have warned of near-term collapse if they did not receive a government bailout.

"I dread looking at Wall Street tomorrow. It's not going to be a pleasant sight," Reid said.

Markets across the Asia-Pacific region fell more than 3 percent on the development, with Japan's Nikkei average and Hong Kong's Hang Seng both down more than 5 percent.

U.S. crude prices fell by nearly $2 to $46.11 a barrel.

Because of their shared suppliers and vendors, industry observers fear the failure of one Detroit manufacturer could drag down the other two as well as other businesses.

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photo: Cars made by Chevrolet are seen at a dealership in Dallas December 3, 2008 (REUTERS/Jessica Rinaldi).