Newspaper article The Christian Science Monitor

Obama Wants More Reform from GM, Chrysler

Newspaper article The Christian Science Monitor

Obama Wants More Reform from GM, Chrysler

Article excerpt

General Motors and Chrysler as yet haven't done enough to earn long-term support from the US government.

That's President Obama's blunt assessment, made public a day before he plans to outline the latest White House aid proposal for the traditional US auto industry.

The troubled firms have made serious efforts to reform, and the White House has said it believes the US can have a successful auto industry.

But GM and Chrysler "aren't there yet," said Mr. Obama in an interview with CBS News' Bob Schieffer that was broadcast on "Face the Nation" on March 29. "We think we can have a successful US auto industry. But it's got to be one that's realistically designed to weather this storm and to emerge, at the other end, much more lean, mean, and competitive than it currently is," he said.

Right now, the "Troubled Two" of the Big Three are surviving on $17.4 billion in government loans provided in the last months of the Bush administration. But given the current collapse in auto sales, they need more - much more. GM is seeking an additional $17 billion. Chrysler wants another $5 billion.

(Ford has said it has enough cash reserves to ride out the current downturn, so it is not applying for direct government loans.

Both GM and Chrysler outlined deep cuts in product lines in restructuring plans filed with the federal government in February. GM is proposing to cut upward of 20 percent of its work force and to focus on Chevrolet, Cadillac, GMC, and Buick as its main brands. Chrysler, among other scenarios, is discussing a plan for the Italian automaker Fiat to take a 35 percent stake in the company, providing it with much-needed small-car technology.

The firms are working closely with the Obama administration's auto task force, said GM chairman Richard Wagoner at a recent breakfast with reporters, sponsored by The Christian Science Monitor.

"We try to update the Treasury almost weekly" on company cash flow, said Mr. …

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