President Obama irked by creditors
WASHINGTON -- President Obama painted Chrysler's plan to file for bankruptcy protection in the best possible light Thursday.
He said the process would be "quick" and "efficient" and "controlled." He said it would not affect consumers or the company's workers.
"No one should be confused about what a bankruptcy process means," he said. "This is not a sign of weakness, but rather one more step on a clearly charted path to Chrysler's revival."
Despite the president's efforts to put a bright face on it, the White House's auto task force had worked hard to try to keep the flagging car company out of bankruptcy. Obama acknowledged as much with a flash of anger at a group of Chrysler creditors who refused to make the kinds of concessions made by autoworkers and other lenders.
The White House wouldn't give in. "I don't stand with those who held out when everybody else is making sacrifices," said Obama, who made the announcement flanked by grim-faced task force members. "That's why I'm supporting Chrysler's plans to use our bankruptcy laws to clear away its remaining obligations so the company can get back on its feet and onto a path of success."
Gary Burtless, an economist at the Brookings Institution, says the Obama administration proved it wouldn't cave to creditors' demands. Avoiding bankruptcy would have been a better outcome, he says, but by telling the creditors who held out for more money that the government would accept bankruptcy, "The administration showed that it wasn't going to be the first to blink."
It was not an ideal end, however, to the 30 days Obama had given Chrysler to come up with a restructuring plan or face liquidation. The president was determined from the start not to preside over the demise of a company that he said "has a particular claim on our American identity."
Rep. Tom Price, R-Ga., criticized Obama for "meddling" in the auto company's business. "We have seen time and time again that Washington's reach into the private sector ends in spectacular failure," he said.
