Obama questions viability of GM, Chrysler

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Barack Obama announces that Edward Montgomery, right, will serve as the Director of Recovery for Auto Communities and Workers.

WASHINGTON – President Barack Obama refused further long-term federal bailouts for General Motors and Chrysler, saying more concessions were needed from unions, creditors and others before they could be approved. He raised the possibility Monday of controlled bankruptcy for one or both of the beleaguered auto giants.

To view dictionary popup window put your cursor on the blue scripture words.
Perplexity

“…upon the earth distress of nations, with perplexityStrongs 640: aporia, ap-or-ee´-a; from the same as 639; a (state of) quandary:—perplexity.
Strongs 639: aporeo, ap-or-eh´-o; from a compound of 1 (as a negative particle) and the base of 4198; to have no way out, i.e. be at a loss (mentally):— (stand in) doubt, be perplexed
….”
—Luke 21:25

At the same time, eager to reassure consumers, Obama announced the federal government would immediately begin backing the warrantees that new car buyers receive — a step designed to signal that it is safe to purchase U.S.-made autos and trucks despite the distress of the industry.

In a statement read at the White House, Obama said he was “absolutely committed” to the survival of a domestic auto industry that can compete internationally. And yet, “our auto industry is not moving in the right direction fast enough,” he added.

With his words, Obama underscored the extent to which the government is now dictating terms to two of the country’s iconic corporations, much as it has already taken an ownership stake in banks, the insurance giant AIG and housing titans Fannie Mae and Freddie Mac.

In an extraordinary move, the administration forced the departure of Rick Wagoner as CEO of General Motors over the weekend, and implicit in Obama’s remarks was that the government holds the ability to pull the plug on that company or Chrysler.

Uncertainty about the industry’s fate sent stocks tumbling, with the Dow Jones industrial average losing as much as 300 points in midday trading.

Ford Motor Co., the third member of the Big 3, has not requested federal bailout funds, and was not included in the president’s remarks.

The Bush administration late last year approved $17 billion in federal funds to help GM and Chrysler survive. It also demanded both companies submit restructuring plans that the Obama administration would review.

Even as he pronounced their effort unsatisfactory, the president said the administration will offer General Motors “adequate working capital” over the next 60 days to produce a reorganization plan acceptable to the administration.

Video

Mich. governor on auto bailouts
March 30: TODAY’s Matt Lauer talks to Michigan Gov. Jennifer Granholm about GM CEO Rick Wagoner’s decision to step down and whether carmakers should get more financial help from the government.
Today show

He said Chrysler’s situation is more perilous, and the government will give the company 30 days to overcome hurdles to a merger with Fiat SpA, the Italian automaker. If they are successful “we will consider lending up to $6 billion to help their plan succeed,” Obama said.

He also announced several steps to reassure consumers, and improve the chances that U.S. automakers will be able to sell their cars and trucks.

The president said the government will now stand behind warrantees issued by the carmakers, a sweeping new guarantee that some in Congress had sought.

He also noted that the economic stimulus legislation he recently signed allows the purchasers of new domestic cars to deduct the cost of any sales and excise taxes. Obama said this provision could “save families hundreds of dollars and lead to as many as 100,000 new car sales.”

  1. Remnant, 31 March, 2009

    “The president said the government will now stand behind warrantees issued by the carmakers, a sweeping new guarantee that some in Congress had sought.”

    The “president” won’t even stand behind the freedom’s that are guaranteed by our constitution!

    How many here would buy even a used car from Obama or Edward Montgomery?

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