US President Barack Obama will unveil tomorrow a much-anticipated plan on the future of ailing US automakers, his spokesman said on Friday.
“A task force is meeting today. They are finishing up the decisions that have to be made and put in place. The president will make an announcement on Monday,” spokesman Robert Gibbs said.
Obama’s auto task force has been working to solve the woes of the “Big Three” US automakers that have been pushed to the brink of bankruptcy in the economic recession amid a global downturn in car sales.
PHOTO: AFP
Two of the firms, General Motors (GM) and Chrysler, have asked for another US$21.6 billion in US aid on top of the US$17.4 billion in emergency loans approved in December as they struggle to survive.
Both companies face a Tuesday deadline to turn in finished restructuring plans to the government, but neither company is likely to have everything done. Neither GM nor Chrysler have deals with the union on the trust funding or concessions from their debtholders, although talks are continuing.
Ford, the other in the trio, has said it had enough cash to survive the downturn without government aid.
Obama made clear on Thursday that the companies would face having to make tough concessions for additional aid, but it was unclear if that meant concessions beyond the initial loan terms.
The president said if the companies were “not willing to make the changes and the restructurings that are necessary, then I’m not willing to have taxpayer money chase after bad money.”
Republicans were signaling their opposition to Obama’s approach.
“Everyone wants America’s automakers to not only survive, but thrive. That’s why it’s difficult to understand the logic of adding more burdens and requirements to the very companies that are struggling to stay afloat,” said Antonia Ferrier, a spokeswoman for House Republican Leader John Boehner.
The Obama administration is likely to demand deeper concessions from Chrysler and GM in exchange for additional federal loans, a person briefed on the government’s plan said on Friday.
The concessions could go beyond the requirements imposed by the administration of former US president George W. Bush when it agreed to loan the automakers money last year, said the person, who asked not to be identified because the government’s plans have not been revealed.
Separately, the head of Italian auto giant Fiat on Friday slammed state aid given to the car industry in the UK, France and Sweden, saying it was “very dangerous” and hurt competition in the sector.
“These are very dangerous unilateral decisions,” Sergio Marchionne said at the company’s annual general meeting in the northern Italian city of Turin, which was targeted by workers protesting layoff conditions.
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