Obama Hoping For `Leaner, Meaner' GM And Chrysler

WASHINGTON — President Barack Obama says General Motors Corp. and Chrysler LLC must emerge from their restructuring as "leaner, meaner" companies and that a substantial market awaits them if they make the right decisions.

Obama said in an interview broadcast Saturday on C-SPAN that the beleaguered automakers should aim to have product lines that appeal to consumers _ and that means fuel efficient and high-performance vehicles that Americans hunger for.

He defended government intervention in the industry, saying the administration could not let either company simply dissolve.

"Our auto industry is the foundation for economies all across the Midwest," Obama said, "and ultimately, for the country as a whole. And had we allowed GM or Chrysler simply to liquidate that would have been a huge anti-stimulus on the economy as a whole, and could have dragged us even deeper into recession or even depression."

The president said that he believes GM ultimately "is going to be a strong company and we are going to be pulling out as soon as the economy recovers and they've completed their restructuring."

Nevertheless, several members of Congress appealed directly to the administration Friday to slow down the restructuring, saying they were worried about shuttered car dealerships, job losses and the big unknown of a GM bankruptcy. They said that a pending June 1 deadline for a GM bankruptcy created more uncertainty for the industry and could lead to a rash of additional job losses and dealership closings.

GM borrowed an additional $4 billion from the government Friday on top of $15.4 billion it previously received. The administration has demanded that the restructuring include cutting labor costs, reducing debt, shedding dealerships and brands, and closing excess factories.

"Keep in mind what's happened in the auto industry," Obama said. "Right now, we're seeing _ we're projecting that maybe this year the auto industry as a whole sells 10 million cars in the United States. Well, replacement numbers for the auto industry, you know, that the number of cars to replace cars on the road is closer to 14, 15, 16 million. And what that means is when the economy recovers and consumers say, you know the old clunker has finally given out. I need to get a new car."

"You are looking at a substantial market that is going to be available for U.S. automakers if they've made some good decisions now, and if they are building the kinds of fuel efficient, high performance cars that American consumers are hungry for," he added.

Obama said he believes have been "weighed down by a legacy of some bad management decisions, health care costs and the whole host of other things that they are now in the process of cleaning up."

"We're confident that they can emerge and take advantage of that new market and actually be very profitable and thrive," the president said. "But it means going through some pain now, and the thing I worry about most is that so much of that pain is borne by workers and communities that have historically been the backbone of the auto industry and so we're going to have to work intensely with those communities."

"If some of those auto jobs don't come back, then what we've going to have to do is make sure that those workers are effectively retrained," Obama said.

Comments

[illusionpainter]

The "Leaner and Meaner" means closing 16 U.S. Plant, putting thousands and thousands out of work, giving our jobs to China, Korea and Mexico, then going from 350,000 GM foreign import into this country to 730,000. They are doing all of this with YOUR AND MY TAX DOLLARS!!!!!! In other words, your taxes dollars are going to take away U.S. jobs and pay Chinese, Korean and Mexican wages instead. If they are going to do that to us and the American people, then I say let them file Chapter 5 LIQUIDATION!!!!! Put them out of business. Let Korea, China and Mexico pay for their company. WE ARE SICK OF IT!!!!!

This is coming from a woman who's husband and daughter work for GM. I have 9 other family members that work for them too.

[vagabondvet]

President Obama also said during the same interview that the US government is out of money.

http://drudgereport.com/flashocs.htm

[Ghostzapper]

Government should not be in business, period. He is an auto economist now, quoting automobile unit volumes and giving billions of our money away. Consumers are not hungry for the types of cars that he is referring to.

[dausone]

We would hope the big 3 could convince consumers that they should be hungry for extremely fuel efficient, environmentally friendly, zero-emissions, all electric vehicles, but they can't. Because they operate on such a large scale, they are forced to maintain the same manufacturing, design, non-innovation decade after decade. To do what Tesla motors is doing would not be sustainable for any mega corporation that operates on a global scale. What the formula has been for the big three is, lets design a vehicle that appeals to the majority of Americans and most consumers overseas, standardize regulations, in the cheapest way possible, using existing technology and manufacturing to maximize profits. Up until now, that model has worked. The big three will be hard pressed to evolve their business model to produce cars that a growing number of consumers want without sacrificing the majority of consumers that accept the same old thing. And this is why I support the small and growing Tesla motors. When their cars are affordable to me, it will be the first American car company that I will support. Things will have to change for the big three, but they are so far behind that they will never be able to catch up without dismantling their corporation. I for one am hungry for the types of cars that Obama is referring to. Actually I am hungry for the type of car that goes beyond what he is referring to. Tesla Model S vs. Chevy Volt, 2011.

[vagabondvet]

If GM were allowed to liquidate, companies like Tesla Motors would have a better shot at creating new vehicles and innovating in the automobile market.