White House (CNSNews.com) - President Barack Obama put strong emphasis on "clean cars" in his announcement Monday about the new restructuring requirements for auto giants General Motors and Chrysler.
The president also announced new tax incentives to encourage Americans to buy U.S. cars and trucks, and that bankruptcy (along with new restructuring) is a possible option for the car-makers.
"I am confident that if we are each willing to do our part, then this restructuring, as painful as it will be in the short term, will mark not an end, but a new beginning for a great American industry -- an auto industry that is once more out-competing the world, a 21st century auto industry that is creating new jobs, unleashing new prosperity, and manufacturing the fuel-efficient cars and trucks that will carry us toward an energy independent future," Obama said in his announcement from the White House.
"I am absolutely committed to working with Congress and the auto companies to meet one goal: The United States of America will lead the world in building the next generation of clean cars,” said the president.
Obama also said that the restructuring plans presented by Chrysler and General Motors, as part of the financial loans they received from the government, had been rejected by the administration. Both car-makers received money last year from the Troubled Assets Relief Program (TARP), a federal law designed to help bail out financial institutions, on the condition that they submit restructuring plans to the administration.
In his announcement on Monday, the president said that GM’s Rick Wagoner was stepping down as CEO of the company. The White House confirmed that it had asked for Wagoner to resign, according to Politico.
"Let me be clear: the United States government has no interest or intention of running GM,” said Obama. “What we are interested in is giving GM an opportunity to finally make those much-needed changes that will let them emerge from this crisis a stronger and more competitive company.”
While GM is required to restructure, Chrysler is mandated to reach a merger agreement with Fiat in order to get additional federal funds.
"Fiat is prepared to transfer its cutting-edge technology to Chrysler and, after working closely with my team, has committed to building new fuel-efficient cars and engines here in America," Obama said. "That is why we will give Chrysler and Fiat 30 days to overcome these hurdles and reach a final agreement – and we will provide Chrysler with adequate capital to continue operating during that time.”
“If they are able to come to a sound agreement that protects American taxpayers, we will consider lending up to $6 billion to help their plan succeed,” said Obama. “But if they and their stakeholders are unable to reach such an agreement, and in the absence of any other viable partnership, we will not be able to justify investing additional tax dollars to keep Chrysler in business."
Obama also said the bankruptcy option -- considered unthinkable by many congressional Democrats – is an option.
"That may mean using our bankruptcy code as a mechanism to help them restructure quickly and emerge stronger," Obama said. "What I am talking about is using our existing legal structure as a tool that, with the backing of the U.S. government, can make it easier for General Motors and Chrysler to quickly clear away old debts that are weighing them down so they can get back on their feet and onto a path to success -- a tool that we can use, even as workers are staying on the job building cars that are being sold."
The president said the IRS is launching a campaign to alert consumers of a new tax benefit for auto purchases made this year, which allows consumers "to deduct the cost of any sales and excise taxes. This provision could save families hundreds of dollars and lead to as many as 100,000 new car sales."