President Obama “announced what amounts to a do-or-die ultimatum for the struggling automobile industry on Monday, laying out strict standards that the carmakers must meet to get more government aid and declaring that the industry must survive because it is ‘like no other, an emblem of the American spirit,’” the New York Times reports.
A failure of leadership “from Washington to Detroit” over the years has led the industry to the brink of collapse, the president said, and in more recent days both General Motors and Chrysler have failed to come up with plans adequate to justify the billions more in government help that they are requesting.
“And so today, I am announcing that my administration will offer G.M. and Chrysler a limited period of time to work with creditors, unions and other stakeholders to fundamentally restructure in a way that would justify an investment of additional tax dollars; a period during which they must produce plans that would give the American people confidence in their long-term prospects for success,” the president said at the White House.
Per the AFP, here is some reaction from Majority Leader Harry Reid (D-NV) on this announcement:
“We will not give these companies a blank check,” said Democratic Senate Majority Leader Harry Reid after the White House said General Motors needs a “more aggressive” restructuring and Chrysler must seal a deal with Fiat to be viable.
“As we have maintained since the earliest days of this crisis, if these companies do not develop strong plans to remain viable in the long term, they will lose our support,” Reid said in a statement.
The lawmaker, who represents Nevada, said Obama’s tough new line aimed to protect taxpayer investments in the troubled firms, move the United States more quickly towards energy independence and ensure the industry’s survival.
“I share the president’s commitment to these objectives, and commend his administration for showing a firm resolve in its negotiations with GM and Chrysler,” said Reid.
“Restructuring the auto industry will inevitably entail difficult decisions for the administration and the companies in question — and indeed some that might be painful in the short term,” said Reid.
“But I remain confident that these goals are not only essential to pursue, but that they will be achieved,” said the senator.
And his counterpart, Minority Leader Mitch McConnell (R-KY) per a press release:
“In spite of tens of billions of taxpayer dollars and many promises to reform the way they do business, it’s clear that management, unions and investors have not yet produced viable plans that would allow the companies to survive without massive infusions of taxpayer dollars. This is a disappointment: How many times do the taxpayers have to provide bailout money on the promise of reform?
“We are now told these two companies are getting their last check from the taxpayers, and that if they don’t finally come up with truly viable plans then they’ll be forced into bankruptcy. Unfortunately, we’ve heard this before, from both this and the previous administrations.
“Republicans in Congress called for true reform before bailouts last year; automakers were given billions instead. Republicans said that taxpayer money set aside to strengthen the economy by preserving the flow of credit shouldn’t be used for bailouts of individual businesses and unions; it was doled out anyway. And Republicans called for an end to funding enterprises that refused to demand reform from management, labor and investors; each refused. The administration says these reforms must now be taken seriously or the taxpayer bailouts will end. While that should have happened tens of billions of dollars ago, we agree that it’s time to get serious.”
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