Obama: Plan for GM May Involve Bankruptcy, fr: Democracy Now

Obama: Plan for GM May Involve Bankruptcy

President Barack Obama has ordered General Motors and Chrysler to accelerate their restructuring efforts and brace for possible bankruptcy. Obama spoke Monday hours after the White House forced GM CEO Rick Wagoner to resign and ordered Chrysler to complete an alliance with the Italian automaker Fiat.

President Obama: “Now, what we’re asking for is difficult. It will require hard choices by companies. It will require unions and workers, who have already made extraordinarily painful concessions, to do more. It will require creditors to recognize that they can’t hold out for the prospect of endless government bailouts. It’ll have to—it will require efforts from a whole host of other stakeholders, including dealers and suppliers. Only then can we ask American taxpayers, who have already put up so much of their hard-earned money, to once more invest in a revitalized auto industry.”

Obama administration officials say they are weighing a fix for GM and Chrysler that would divide their “good” and “bad” assets and send the auto makers into bankruptcy. If GM declared bankruptcy, up to one million employees, dependents, retirees and their spouses could lose healthcare and retirement benefits. A bankruptcy judge recently allowed car part suppler Delphi to cancel healthcare and life insurance benefits for retirees, calling the moves “good business judgment.” During his address on Monday, President Obama said nothing about protecting the benefits of workers and retirees. GM’s shares plunged 25 percent Monday, and the Dow Jones Industrial Average fell 3.3 percent. President Obama said there is no plan to nationalize General Motors.

President Obama: “Let me be clear: The United States government has no interest in running GM. We have no intention of running GM. What we are interested in is giving GM an opportunity to finally make those much needed changes that will let them emerge from this crisis a stronger and more competitive company."

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While GM’s CEO Rick Wagoner is being forced to resign, he still stands to make millions. ABC News reports that Wagoner will be eligible to collect $20 million in retirement benefits from GM....