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Obama defines deadline for GM, Chrysler to complete new restructuring plans

2009-03-30 16:47:20 (GMT) (Caymanmama.com - Automotive Business Top Stories News)

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Chrysler Headquarters at Auburn Hills

During a speech given at the White House, Obama said auto industry must be self-sustaining, not as “wards of the state” supported by tax payers

Buffalo, New York (CaymanMama.com) — President Barack Obama has snubbed the rehabilitation plans from struggling automakers General Motors Corp. and Chrysler and set stringent, new deadlines for them to devise new restructuring plans.

During a speech given at the White House, Obama said auto industry must be self-sustaining, not as “wards of the state” supported by tax payers.

General Motors Corp. has been allotted 60 days worth of financing to restructure, while Chrysler has been given $6 billion and 30 days to finalize deal with Italian automaker Fiat.

The Obama administration also chose to replace GM’s CEO Rick Wagoner with the company’s chief operating officer, Fritz Henderson.

If the companies do not meet their deadline, Obama highlighted to very real result of using bankruptcy laws to force the automakers’ restructuring.

According to the Associated Press, “President Barack Obama said Monday that neither General Motors nor Chrysler has proposed sweeping enough changes to justify further large federal bailouts, and demanded “painful concessions” from creditors, unions and others as their price for survival.”

During his stern speech, Obama made it clear to what extent the government is now dictating terms to the iconic American companies, and bluntly warned it may disassemble either or both companies.



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