Auto Plan a Balancing Act for Obama
By Ben Pershing
Give the White House credit for one thing this morning -- at least it has demonstrated it can keep a secret. Until yesterday, President Obama's latest plan for dealing with the nation's beleaguered auto industry was kept almost completely under wraps. Now the full strategy has been unveiled, and it goes much further than most political or economic observers expected: GM CEO Rick Wagoner is out, along with most of his board. The company has two months to get its act together, while Chrysler has a month, and the government is now seriously entertaining the possibility of letting both slip into bankruptcy.
The stock market is expected to drop at the opening bell this morning in response, and Obama's bold move raises another question: What will this plan do to his political stock? After the AIG bonus debacle, it seems clear that the White House believes it needs to take a more hands-on role with companies receiving government bailout money (so hands-on, in this case, that the government will actually guarantee auto warranties). But is the president really willing to let two of the nation's three major automakers go belly-up on his watch? Back in September and again in February, polls found that strong majorities of Americans didn't want any more taxpayer money going to GM or Chrysler. Obama can comfort himself with those poll numbers if and when thousands more auto workers are on the news lining up for unemployment benefits.
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