UPDATE: Obama: Auto Cos Will Get 'Some Help'; But Must Change
26 März 2009 - 7:06PM
Dow Jones News
Previewing his looming decision on the U.S. auto industry, U.S.
President Barack Obama suggested struggling car makers will receive
more federal aid, but added that the money will be contingent on
the sector making "some pretty drastic changes."
"We will provide them with some help," Obama said at an
interactive town hall meeting in the White House. "I know that it
is not popular to provide help to auto workers or to auto
companies, but my job is to measure the costs of allowing these
auto companies just to collapse versus us figuring out can they
come up with a viable plan."
Obama's auto-sector task force has been evaluating General
Motors Corp. (GM) and Chrysler LLC to determine whether the firms
merit another injection of government cash. The companies have
requested $22 billion, including $9 billion for the second
quarter.
Obama said the administration would provide extensive details on
its stance on the auto makers in the next few days.
Allowing the firms to slide into bankruptcy could cost thousands
of jobs across the industrial sector, not just at GM and Chrysler,
but at hundreds of dealerships, suppliers and related companies. At
the same time, the White House is under pressure not to bail out
companies that critics say are a victim of their own
mismanagement.
Obama said all parties - shareholders, workers, creditors,
suppliers, and dealers - would have to make concessions because the
industry's current model, which he said relies on low gas prices,
is unsustainable.
"If they're not willing to make the changes and the
restructurings that are necessary, then ... I'm not willing to have
taxpayers' money chase after bad money," Obama said. "And so a lot
of it's going to depend on their willingness to make some pretty
drastic changes. And some of those are still going to be painful,
because I think you're not going to see a situation where the U.S.
auto makers are gaining the kind of share that they had back in the
1950s."
Though he didn't detail a specific remedy for the sector, Obama
made clear that he wants it to survive.
"We need to preserve a U.S. auto industry," Obama said. "I think
that's important. I think it's important not just symbolically,
it's important because the auto industry is a huge employer, not
just the people who work for GM or Ford or Chrysler, but all the
suppliers, all the ripple effects that are created as a consequence
of our auto industry."
Thursday's event, moderated by Vice President Joe Biden's top
economic adviser, Jared Bernstein, was billed as the first-ever
interactive town-hall meeting by a president. The White House
collected more than 104,000 questions from nearly 93,000 people
this week. Over 3.6 million votes were cast for which questions
should be lobbed at Obama.
The president took questions submitted in writing, as well as
via video, and from the live audience, which the White House said
was made up of around 100 people, including teachers, nurses and
business owners. The event was streamed live over the White House
website.
The top questions - on education, homeownership, outsourcing and
health care - gave Obama a chance to tout the initiatives his
administration has implemented through the $787 billion economic
stimulus package or is pushing in its budget blueprint.
Obama said Americans should be "patient and persistent" about
the ailing labor market, warning that unemployment is likely to
worsen in the months ahead. "I don't think we've lost all the jobs
we're going to lose in this recession," he said, adding that the
job market is likely to endure a "difficult time" over the next
several months, and possibly into next year.
The U.S. has lost 4.4 million jobs since the recession started
in December 2007, with almost half of those losses coming in the
last three months alone.
For Obama, the town hall meeting is the latest in an aggressive
public outreach campaign on his $3.6 trillion budget proposal and
the steps the administration is taking to address the economic
crisis.
White House spokesman Robert Gibbs said Obama would use the
forum to provide another "update" to the American people. "It's a
way for the President to do what he enjoys doing out on the road,
but saves on gas," Gibbs said Wednesday.
-By Henry J. Pulizzi, Dow Jones Newswires; 202-862-9256;
henry.pulizzi@dowjones.com