The automobile industry will be getting some tough love, including additional restructuring and layoffs and possible bankruptcy filings, as part of the rescue plan unveiled today by President Obama.
G.M. has sixty days to come up with a restructuring plan and the administration will lend it money during that time period to keep the company running. Chrysler must form a strategic alliance with Italian automaker Fiat and then the administration will consider giving the company additional loans. The government has lent the companies $17 billion since last December.
Other parts of the plan include tax incentives for consumers buying fuel-efficient vehicles and the government guaranteeing the warrantees of cars purchased by the troubled companies.
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"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," he said in a White House speech.
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