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Obama: GM, Chrysler May End Up In Bankrutpcy

President Obama just concluded remarks on the restructuring of the U.S. auto industry and said that saving troubled automakers GM and Chrysler "may mean using our bankruptcy code to help them restructure quickly and emerge stronger."

Obama then attempted to make clear that bankruptcy would not mean liquidation of the two companies. Instead, it would be a government-backed bankruptcy that would allow the automakers "quickly clear away old debts" while most workers keep their jobs.

Obama also ticked off a number of other items, which were reported by Peter Whoriskey in today's Post.

-- If Chrysler can wrap up its merger deal with Fiat in 30 days, the combined company will get an additional $6 billion in federal loans. Obama said his team has concluded that Chrysler cannot survive as a standalone company. The government will provide Chrysler with "additional working capital" of an unspecified amount in the time being, Obama said.

-- GM gets an additional 60 days to retool its restructuring plan in order to receive an unspecified additional federal loan. The government will provide GM with "additional working capital" of an unspecified amount in the time being, Obama said.

-- The U.S. government is backing warranties of GM and Chrysler vehicles. Obama sounded like a car salesman when he said, "If you buy a car from Chrysler or GM, you will be able to get your car serviced and repaired."

-- GM and Chrysler have extensive operations in Canada and that nation will announce its GM/Chrysler bailout plan later today, Obama said.

-- Obama said that the White House ouster of GM chief executive Rick Wagoner "is not a condemnation of Mr. Wagoner."

-- Former deputy Labor secretary Edward Montgomery, a University of Maryland dean, will be the restructuring czar for GM and Chrysler.

-- Frank Ahrens
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By Frank Ahrens  |  March 30, 2009; 11:41 AM ET
Categories:  The Ticker  | Tags: Chrysler, GM, Obama, Rick Wagoner  
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Next: Chrysler, Fiat Respond to Obama but Deal Not Wrapped Up Yet

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