WASHINGTON (AFP)--The White House Sunday demanded deep
restructuring from embattled U.S. automakers as General Motors (GM)
and Chrysler readied to present their plans in return for billions
in government loans.
David Axelrod, a senior adviser to President Barack Obama, said
the collapse of talks between GM and the United Auto Workers union
underlined the gravity of the situation as Tuesday's restructuring
deadline loomed.
"We need a thriving auto industry in this country," he said on
Fox News Sunday, stressing that millions are employed by GM,
Chrysler and Ford (F) and by related suppliers.
"But as the president has said many times, that's going to
involve significant restructuring of the industry so that they're
looking forward and not back in producing the kind of cars that
people are going to buy in the future," Axelrod said.
"And that's going to involve concessions on the part of
everyone, not just the auto workers, but shareholders, creditors
and, of course, the executives who run the company."
GM and Chrysler, which are receiving $13.4 billion in government
loans, have until Tuesday to present preliminary plans to the
Treasury Department outlining their steps to reduce costs and plan
for the future.
The final plan that will serve as a basis for the Treasury's
decision to call in or extend the loans is due by March 31.
The two companies were brought to the brink of bankruptcy last
year as auto sales collapsed amid a credit crunch and widening
recession.
Ford insists it has sufficient cash reserves to survive the
downturn without federal aid despite a $5.9 billion loss in the
fourth quarter.
Negotiations on union backing for the restructuring at GM
collapsed over the weekend after the UAW reportedly balked at
management's plans to reform pensions for retired workers.
"Obviously this is a difficult situation, and everyone's going
to have to continue to work toward a solution," Axelrod said in
response.
"We're going to wait and see what the automakers have to say on
Tuesday. We'll go from there."