Hey automakers, you want some more money?
President Obama issued an ultimatum for carmakers Monday, saying that if they fail to meet new guidelines outlined by his cabinet they will not‚ receive‚ government aid and subsequently go under.
Obama said that carmakers like G.M. and Chrysler have come up with projections that do not qualify them to receive the billions of dollars for which they are asking.
“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,” said Obama, according to the New York Times. He also said that he hopes this will give the American public more confidence in the long-term success of these automakers, which would ultimately save and reinstate thousands of jobs.
The Times reports that Obama has instated Edward Montgomery, the former labor secretary, to shepherd‚ recovery‚ the effort. The White House has already instructed Chrysler to partner with Italian manufacturer Fiat within 30 days; one of the conditions they must meet to receive more money.
Another one of the conditions of the ultimatum include tax breaks for people who buy cars before the end of the year, which act as an enticement for people to trade in older less-fuel efficient cars for newer, more fuel-efficient wheels. Also, the government will provide warrants on new cars so people are not afraid to purchase from G.M. or Chrysler.
And while Obama outlined his government’s control over the auto industry, he did stress that he feels it necessary for them to act on their own in the near future. “These companies “" and this industry “" must ultimately stand on their own, not as wards of the state” he said, according to the New York Times.
Obama made no mention of Ford, the third company in Detroit’s Big Three. They have not yet asked for any government assistance.