Obama: More necessary pain ahead for automakers
DETROIT -- Obama also raised the possibility of a controlled bankruptcy — term industry and union officials have warned repeatedly could lead to the collapse of an entire domestic industry — to help either or both "restructure quickly and emerge stronger."
By his comments Obama underscored the extent to which the government is now dictating terms to two of the country's iconic corporations — forcing the departure of Rick Wagoner as CEO of General Motors, and bluntly warning taxpayers may pull the plug on either or both companies.
The Bush administration late last year approved $17 billion in taxpayer money to help GM and Chrysler survive. It also demanded both companies submit restructuring plans that the Obama administration would review.
Even as he pronounced their effort unsatisfactory, the president said the administration will offer General Motors "adequate working capital" over the next 60 days to produce an acceptable reorganization plan.
He said Chrysler's situation is more perilous, and the government will give the company 30 days to complete plans for a merger with Fiat, the Italian automaker. If the companies succeed, "we will consider lending up to $6 billion," he said.
Obama spoke at the White House with the U.S. auto industry standing at another crossroads. As the president noted, the industry has shed more than 400,000 jobs the past year as the recession took hold and auto sales plummeted. Officials announced last week that bailout money would be available to companies that supply the automakers, to try to keep them afloat.
Obama said he is committed to the survival of an auto industry — on terms that will allow it to compete internationally.
"But we also cannot continue to excuse poor decisions," he said. "And we cannot make the survival of our auto industry dependent on an unending flow of tax dollars."
Related Stories
ABC News Live