March 30th, 2009
11:35 AM ET
14 years ago

Obama extends short federal lifeline to GM, Chrysler

[cnn-photo-caption image= caption="President Obama announced his plans for troubled U.S. automakers on Monday."]WASHINGTON (CNN) - President Barack Obama announced Monday that struggling automotive giants General Motors and Chrylser will be given a "limited" period of time to "restructure in a way that would justify an investment of additional taxpayer dollars."

The federal government will give GM "adequate working capital" over the next 60 days to work in conjunction with the administration in developing a better recovery plan, he said.

Chrysler will be given "adequate capital" to continue operations for 30 days while completing a merger with automaker Fiat. The president said that if Chrylser can come up with a "sound agreement that protects American taxpayers, we will consider lending up to $6 billion to help their plan succeed."

Related: Polls: Americans don't like auto bailouts

Obama also indicated that both GM and Chrylser might need to file for bankruptcy in the process of successfully restructuring, which will involve working with "creditors, unions and other stakeholders."

"While Chrysler and GM are very different companies with very different paths forward, both need a fresh start to implement the restructuring plans they develop. That may mean using our bankruptcy code as a mechanism to help them restructure quickly and emerge stronger," Obama said in remarks delivered at the White House.

Filed under: President Obama
soundoff (80 Responses)
  1. Mike in Philly

    "Obama REQUESTED that Rick Wagoner resign. He did not tell him to. Rick Wagoner did not have to resign."

    Of course he did. Doesn't matter if it was couched in terms of a "request", it was an order, and he (and we) knew it. If he wanted to be defiant, and stay on, then his company would have suffered even more, since the gov't would have washed their hands of them. Or forced them into bankruptcy.

    March 30, 2009 12:52 pm at 12:52 pm |
  2. D-MI

    @ ANDY-L:

    You are amazed because you- like most Repulicans- don't understand that GOVERNMENT IS NOT A PROFIT MAKING BUSINESS. Nor should it be.

    Why is it that you guys believe companies that are based on a CAPITALIST business model should receive a free-hand and special favors from the government; but the people, who that government is supposed to govern and ensure the safety and WELL-BEING of, should be left to their own devices?

    There is a name for that sort of arrangement sir: it is called FASCISM. Look it up. It failed in Italy and bankrupted the country and led them to war. It failed in Spain and nearly destroyed that country. It fails EVERYWHERE, because when you have 1% of the population controlling all the wealth and sneering at the other 99%, that 99% gets very angry pretty damn fast...

    March 30, 2009 12:52 pm at 12:52 pm |

    First thing s first... the last bailout monies received, correct me if I'm wrong, were under G.W. before he left office....... people must understand two things.... firstly no american wants to see GM, or Chrysler fall, as this equates to massive job loss possibly 4 million more jobs..... secondly, the reason for the financial sector given so much money, is due to the negative effect banks, and financial firms will have on 401k's across the country, pensions for teachers, police, firefighters, across the country.....then there's the global effect of these companies falling......
    However, if one or all of the big three fail, this will cause a catastrophe also.....nationally and globally..... government is trying to get them to restructure w/o filing fo chp.11.....I swear it sucks to be President right now, w/ suck a hossana, then crucify him electorate.....Liberals, ore fiscal dems.... hang on.. the right wants to destroy this president.... don't let them do it in 3 months.......P.S. Paul Krugman (liberal economist) needs to be part of the solution not the problem...just a personal shot for those in the know......

    March 30, 2009 12:53 pm at 12:53 pm |
  4. Terry in NY

    So why aren't we going after the UAW which ais as much at fault here as anyone. Maybe more! The fat cats from the middle MANAGEMENT at the UAW are knocking down well over 100K just to keep your monthly dues flowing in. It's time for them to go! The need for Unions in this day and age are gone. There are enough laws out there to protect workers. Do you job keep your job. Do your job real well, get paid real well. The Unions are only needed for the low lifes that really don't want to work. They'd just as soon let there brethren suffer just so they get a pay check.

    March 30, 2009 12:53 pm at 12:53 pm |
  5. John

    William in Oregon: Do you have any clue about the auto industry? Toyota, Honda, and Nissan all have performance vehicles like the Camero. Vehicles within that price range. Have ever heard of the Nissan GT-R, Lexus IS-F, Lexus LF-A, Infinity G-37, Nissan 370 Z, Acura NSX, etc? I can keep the list going and going. That is not even including the performance vehicles coming from Europe of future production models. Every auto company has a performance vehicle. It creates excitement around the brand. The Chevy Camero has a base MSRP that will be less than $23,000. The Chevy Aveo get's up to 35 mpg and starts at $12,625. Do some research instead of making erroneous claims.

    March 30, 2009 12:56 pm at 12:56 pm |
1 2 3 4