President Barack Obama on Monday said U.S. automakers General Motors and Chrysler will require further restructuring to receive additional government aid.
In a press conference at the White House, Obama, flanked by members of his Cabinet, detailed the measures the administration is imposing on the struggling companies following the evaluation of his auto industry task force.
The U.S. government will give GM working capital for 60 days but has demanded additional concessions from GM bondholders, union workers, and management. Rick Wagoner was asked to step aside as CEO and will be replaced by Frederick "Fritz" Henderson.
In its evaluation, the U.S. government found Chrysler less financially viable. An additional $6 billion loan is contingent on Chrysler striking a partnership with Fiat or another automaker in the next 30 days.
In his comments, Obama made clear that the administration considers fuel-efficient vehicles integral to revitalizing U.S. automakers.
"I am absolutely committed to working with Congress and the auto companies to meet one goal: the United States of America will lead the world in building the next generation of clean cars," Obama said. He noted that many American-made car companies, including GM, have made significant advances in producing fuel-efficient cars.
The administration determined that bankruptcy is one possible way to restructure GM quickly, although Obama said he opposes a drawn-out legal proceeding or dismantling the company. "What I am talking about is using our existing legal structure as a tool that, with the backing of the U.S. government, can make it easier for General Motors and Chrysler to quickly clear away old debts that are weighing them down," he said. … Read more