He praised the struggling automaker, which filed for bankruptcy Monday, for submitting a "viable, achievable plan that will give this iconic American company a chance to rise again."
The deal reached with GM's stakeholders, Obama said at the White House, is "tough, but fair."
Obama noted that GM will receive $30 billion in additional funding from taxpayers, giving the public a 60 percent share in the company.
The government agreed to become a "reluctant" shareholder, he said, because that is the only way GM can survive.
He said the federal government will refrain from exercising its shareholder rights in all but the most fundamental decisions.
At the same time, however, he announced that, under GM's restructuring plan, the company will begin to build a larger share of its cars in the United States.
Obama said that, from the beginning, he had made it clear he wouldn't "kick the can down the road" and let GM and Chrysler "become permanent wards of the state." At the same time, however, he also recognized the importance of the companies to the broader economy.
WASHINGTON (CNN) - President Obama issued the following statement Friday about the latest developments in Chrysler's bankruptcy case:
“The decision by Judge Gonzalez of the United States Bankruptcy Court for the Southern District of New York to approve the Chrysler sale transaction paves the way for the new Chrysler to successfully emerge from bankruptcy as a new, stronger, more competitive company for the future. Only a month ago, this great American company’s very future was in doubt. Now, as a result of a substantial commitment by the U.S. government, and tough sacrifices from all stakeholders involved, Chrysler has a new lease on life. We said this process would be completed quickly and efficiently, and that’s exactly what has been accomplished today. Tens of thousands of American jobs will be saved as a result of this extraordinary effort.”
Related on CNNMoney.com: Judge approves sale of Chrysler assets
The president also blasted a group of investment funds and hedge funds for holding out for an "unjustified taxpayer bailout."
Several financial institutions, led by J.P. Morgan, agreed to reduce Chrysler's loan repayment obligations by as much as two-thirds, Obama said.
But "a group of investment firms and hedge funds decided to hold out for the prospect of an unjustified taxpayer-funded bailout" Obama said. "They were hoping that everybody else would make sacrifices and they would have to make none."
Some investors "demanded twice the return that other lenders were getting," Obama noted.
"I don't stand with them. I stand with Chrysler's employees and their families and communities. I stand with Chrysler's management, its dealers, and its suppliers. I stand with the millions of Americans who own and want to buy Chrysler cars. I don't stand with those who held out while everybody else made sacrifices."
Chrylser's bankruptcy won't affect consumers, Obama promised. Chrysler's warrantees have been guaranteed by the federal government.
"Every dime of taxpayer money will be repaid" before Fiat takes a majority stake in Chrysler, Obama added.
WASHINGTON (CNN) - Chrysler plans to file for bankruptcy, an Obama administration official said Thursday.
(CNN) - The United Auto Workers union announced Sunday it had reached an agreement with Chrysler, Fiat and the U.S. government that meets the requirements of the Treasury Department for loans to the auto giant.
In a statement, the UAW said the deal was still subject to ratification by union members at Chrysler.
The "painful" concessionary agreement, the UAW said, "includes modifications to the union's 2007 collective bargaining agreement and the Voluntary Employee Beneficiary Association (VEBA) trust."
Union members must approve the deal by Wednesday, the statement said.
(CNN) – Three-quarters of all Americans think that the federal government should let General Motors or Chrysler go bankrupt rather than pumping more money into the struggling automakers, according to a new CNN/Opinion Research Corporation poll - and most now say that the economy would not face major problems if those companies went into bankruptcy.
The public used to think that the automakers were too big to fail, but not any longer. In December, two-thirds say auto bankruptcies would create major problems or a crisis for the U.S. economy. Now most say that would only cause minor problems or no problems at all.
And Americans don't see any effect on their own lives if the automakers fail: 55 percent say they would face no problems at all if the auto companies went bankrupt. Only 37 percent say they would buy a car from a bankrupt company. But that number rises to 57 percent if the federal government stands behind the warranty on those cars.
The survey includes telephone interviews with 1,023 adult Americans. It was conducted April 3-5, 2009, and has a margin of error of plus or minus 3 percentage points.
(Full results after the jump)
CNN has learned that the Obama administration asked GM CEO Rick Wagoner to resign. (Photo Credit: Getty Images/File)
WASHINGTON (CNN) - General Motors Chief Executive Rick Wagoner will resign as part of the federal government's plan to bail out the struggling automaker, White House and GM sources told CNN Sunday.
Wagoner's departure comes the day before President Barack Obama is expected to announce the latest details of the government's assistance plan for GM and Chrysler LLC.
A GM spokesman declined to comment, but a statement from the company said, "We are anticipating an announcement soon from the administration regarding the restructuring of the U.S. auto industry."
The two automakers face a Tuesday deadline to prove to the Treasury Department that they can be viable in the long term. Without such a finding, the government can recall the $13.4 billion it has already lent to GM and the $4 billion it loaned to Chrysler.
A 32-year company veteran, Wagoner has been CEO of GM since 2000.
Updated: 6:21 p.m.
–CNN's Kate Bolduan and John King contributed to this report.
WASHINGTON (CNN) – Michigan Gov. Jennifer Granholm told President Barack Obama to ignore persistent Republican criticism that he is trying to do too much in a time of economic crisis and, instead, urged the new president to tackle the nation’s health care costs as part of a larger effort to get the economy back on track.
“I think he should do it,” Granholm said when asked whether Obama should forge ahead with health care reform even if doing so meant more taxes or more deficit spending in the current tough economic times.
“It is part of the economy. If you look at the manufacturing sector, one of the huge costs on that sector is health care,” the governor said, noting the impact that health care costs are having on her state’s automotive industry. “It is part of the economic malaise that this country is feeling. So they need to fix that.”
In the wake of Obama’s efforts late last week to tamp down growing controversy over $165 milllion in bonuses paid to AIG employees, Granholm also highlighted a growing sense of a double standard in Michigan.
NEW YORK (CNNMoney.com) – The Obama administration's top auto advisors were in the Detroit area Monday to meet with officials from General Motors and Chrysler, test drive a new electric car and try to chart a course for the industry's rescue.
March 31 is the stated deadline for the government to decide whether General Motors and Chrysler LLC, which have already received $17.4 billion in loans between them and have asked for up to $21.6 billion more in the coming weeks to help them avoid running out of money, deserve another bailout.
Steven Rattner and Ron Bloom, two former investment bankers brought in to advise the Treasury Department on the best course for saving the automakers, and Diana Farrell and Brian Deese, two members of the National Economic Council, made the visit to Detroit Monday.
NEW YORK (CNNMoney.com) - General Motors Corp. said in a government filing Thursday that its accounting firm has found there is "substantial doubt" about the automaker's ability to survive.
The embattled automaker made the disclosure in a 480-page filing with the Securities & Exchange Commission.
GM has sustained large and continuing losses, while saying it needs additional federal loans to remain in business. Thursday's statement from the company's auditors presents another hurdle the automaker will have to clear as it makes the case that it deserve additional taxpayer support going forward.
The Obama administration, under the terms of the $13.4 billion in federal loans GM has already requested, must determine that the company's plans make it viable in the long run.