U.S. President Barack Obama took a hard stance on Monday towards automakers, giving General Motors 60 days to come up with a viable restructuring plan, and Chrysler 30 days. If the companies fail to meet this ultimatum, Obama plans to allow them to file for bankruptcy.
The administration’s analysis of the viability of the two auto giants was merciless and remarkably specific in its critique of their business practices. It said GM’s underperforming dealers were a drag on the company and its car of the future, the plug-in Chevrolet Volt, held promise but was too expensive. As for Chrysler, the president said it could only survive with an international partner, the Italian carmaker Fiat SpA.
All in all, the administration and its auto task force concluded that the automakers’ plans to change their mix of products, fix their balance sheets, reduce production capacity and launch new vehicles were simply too slow.
The remarks came a day after the administration forced Mr. Wagoner’s departure and rejected the restructuring plans that GM and Chrysler had hoped would lead to another infusion of government loans.
Image by freebird710 under Creative Commons.
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