Obama outlines GM bankruptcy plan
Published: Monday, June 1, 2009 at 8:10 a.m.
Last Modified: Monday, June 1, 2009 at 8:58 a.m.
WASHINGTON — President Barack Obama pushed General Motors Corp. into bankruptcy on Monday and said it was part of a "viable achievable plan that will give this iconic company a chance to rise again."
Obama said he hoped the U.S. firm would emerge quickly from bankruptcy court, and said the government was ready to commit an additional $30 billion to help the company get on its feet.
He said the government would own 60 percent of the new GM, and acknowledged that could prove controversial with some.
Seeking to ease those concerns, Obama said, "What I am not doing, what I have no interest in doing, is running GM."
The president said auto executives "will call the shots and make the decisions about turning this company around." He said the government would refrain from playing a management role in all but the most critical areas.
"Our goal is to help GM get back on its feet ... and get out quickly," he said of the federal government.
Obama spoke as GM entered bankruptcy court at the same time Chrysler was looking to emerge after a two-month reorganization. Over the weekend, a bankruptcy judge gave the No. 3 automaker approval to sell most of its assets to Italy's Fiat, part of a plan under which the U.S. government will own somewhat less than 10 percent of the firm.
Ford Motor Co., the other large U.S. automaker, has said it can weather the current economic and industry crises on its own.
Under the GM plan envisioned by Obama's auto industry taskforce, the federal government will wind up with 60 percent ownership in the one-time pillar of American capitalism.
That comes in addition to its smaller stake in Chrysler, as well as significant interests in banks, insurance giant AIG and two mortgage industry giants, Fannie Mae and Freddie Mac.
Obama thanked the governments of Canada and Germany for the part they played in helping develop the GM plan.
Speaking at the White House, where he was flanked by Cabinet secretaries and economic advisers, Obama said the coming restructuring will "take a painful toll on many Americans" with the closure of additional plants and the loss of jobs.
The president did not pause to answer questions, but Republicans had plenty.
"The only thing it makes clear is that the government is firmly in the business of running companies using taxpayer dollars," said House Republican Leader John Boehner.
"Does anyone really believe that politicians and bureaucrats in Washington can successfully steer a multinational corporation to economic viability? It's time for the administration to fully explain what the exit strategy is to get the U.S. government out of the board room once and for all," Boehner said.
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