White House: No Doubt US Needs Strong Auto Sector
05 März 2009 - 10:31PM
Dow Jones News
As new fears over General Motors Corp.'s (GM) viability sent the
auto maker's shares tumbling, the White House renewed its
commitment to a "restructured and retooled" U.S. auto industry and
said it is looking at potential government assistance for a variety
of sectors.
"I don't think it comes as a big surprise to many that the auto
industry is in crisis," White House spokesman Robert Gibbs said.
"If you look at the plans that were submitted recently by GM and
Chrysler - and certainly if you look at last month's auto sales -
you understand the level and the depth of the crisis that the auto
industry is in."
Earlier Thursday, GM's auditors said its continuing losses,
negative net worth and inability to generate cash for continued
operations across its global operations raise substantial doubt
that it can remain a going concern.
The warning, included in GM's delayed 10-K filing with the
Securities and Exchange Commission, forced the company to seek
waivers from lenders. It comes amid continuing talks between the
company's bondholders about converting $16 billion of GM debt into
equity, and as the administration evaluates the company's recently
completed viability plan.
It remains unclear if the company will be able to receive more
government cash.
The White House's budget request last week included a $250
billion placeholder for potential bailouts, an amount that could
allow the government to purchase $750 billion in troubled
assets.
Though the White House doesn't currently have plans to use the
funds, Gibbs repeated that more government money is likely to be
needed to help weather the recession.
"You know, the team continues to assess what's out there on any
number of industries and make decisions in conjunction with the
president," Gibbs said. "But I don't think there's any doubt we
need a strong auto industry in this country."
-By Henry J. Pulizzi, Dow Jones Newswires; 202-862-9256; henry.pulizzi@dowjones.com