Obama:'Viable, Achievable' Plan Gives GM Chance To Rise Again
01 Juni 2009 - 7:05PM
Dow Jones News
President Barack Obama said General Motors Corp.'s (GM)
restructuring plan provides an opportunity to emerge quickly from
bankruptcy as a stronger company, but warned that fixing the
troubled auto maker will take a "painful toll" on many
Americans.
"Working with my auto task force, GM and its stakeholders have
produced a viable, achievable plan that will give this iconic
American company a chance to rise again," Obama said at the White
House.
"I will not pretend the hard times are over," he added.
"Difficult days lie ahead. More jobs will be lost. More plants will
close. More dealerships will shut their doors, and so will many
parts suppliers."
The government will inject another $30 billion into GM to help
it get through the bankruptcy process, an investment that will pump
the government's ownership position in the company to 60%. Obama
repeated that the government is a "reluctant shareholder" with no
interest in running the company's day-to-day operations.
The president was speaking hours after GM filed for protection
in New York and as Chrysler LLC prepared to emerge from its own
bankruptcy. He said none of the company's stakeholders are
receiving special treatment, saying that the United Auto Workers is
making "painful sacrifices, on top of all that they've already
done."
He said unsecured bondholders, who agreed to swap $27 billion in
debt for up to 25% of GM's equity, will recover "substantially
more" than they would have without government help or if the
company had been liquidated.
"I instructed my auto task force to treat all of GM's
stakeholders fairly and to ensure that this restructuring was
carried out in a way that was consistent with past precedent. And
it was," Obama said.
-By Henry J. Pulizzi, Dow Jones Newswires; 202-862-9256;
henry.pulizzi@dowjones.com