Sen. Ben Nelson said federal bailout assistance for the nation’s Big Three automakers would be preferable to allowing them to slip into bankruptcy.

But any aid package should be structured with “rigorously enforced conditions,” Nelson said Wednesday.

“A loan with stock taken as security makes some sense,” he said.

And conditions would need to include “changing the direction of vehicle manufacturing to a greener-type vehicle in terms of what it uses as fuel,” Nelson said.

“I don’t believe bankruptcy is the appropriate way to deal with this,” he said during a telephone news conference from Washington.

Later Wednesday, Senate Majority Leader Harry Reid, D-Nev., scrapped plans for a vote on a bill to carve $25 billion in new auto industry loans out of the $700 billion Wall Street rescue fund.

The consequences of bankruptcy could push the U.S. auto industry “from crisis to cataclysmic,” Nelson said.

Democratic leaders in Congress have proposed a plan that would lift $25 billion from the $700 billion financial bailout package to provide emergency loans to General Motors, Ford and Chrysler.

The Bush administration opposes the plan.

“Not doing something is not going to be possible,” Nelson said.

But, in providing any assistance, Congress would need to “require the auto industry to change the way it does business,” he said.

Nelson said he is studying the $25 billion loan plan before committing his support.

Nebraska is affected by the auto industry financial crisis, he said.  Auto dealers, mechanics and auto parts suppliers would all be affected, he said.

“The dots connect from Motown to Our Town, Nebraska,” Nelson said.

Reach Don Walton at 473-7248 or at dwalton@journalstar.com.