U.S. index futures dropped dramatically on Friday after the failure of the Senate to pass a bill which would have lent $14 billion to the auto industry.

Emergency loans for General Motors and Chrysler LLC were denied last night following failed talks over Republican senators’ demands that union workers accept a wage cut next year. GM and Chrysler say that they may run out of money for their operations amid sales reaching their lowest point in 17 years.

Down Jones industrial average DJc1 dropped 294 as S%P 500 SPc1 futures went down 20.70 points and NASDAQ 100 NDc1 futures lost 28.50 points.

The U.S. senate failed to reach a compromise on the matter of providing aid do the decaying auto industry, and thus it is unlikely that any further congressional action is going to be taken this year. Auto makers’ shares nosedived in premarket trade after the legislation failed to pass.

Shares of General Motors, a Dow component, shed 35 percent down to $2.68 while shares of Ford Motor Co. went down 14.1 percent settling at $2.49.

GM is struggling with almost $73 billion in losses since 2004, and a 22 percent fall in U.S. sales this year alone. The auto manufacturer lost $4.2 billion in the third quarter.

Job losses from an automaker bankruptcy in 2009 would total between 2.5 million to 3.5 million, that’s including 1.4 million people in industries not directly tied to car manufacturing, says a report published on November 4 by the Center for Automotive Research, which performs studies for government agencies and companies.