Obama faces tough decisions on US auto industry

[Psephos]

Source: AP

WASHINGTON – The Obama administration faces difficult choices on the fate of the U.S. auto industry, weighing the cost of pouring billions more into struggling companies against possible bankruptcies that could undermine plans to jump-start the economy.

General Motors Corp. and Chrysler LLC are racing against a Tuesday deadline to submit plans to the government to show how they can repay billions in government loans and return to viability despite a sharp decline in auto sales. The terms of the federal loans set "targets" for concessions, largely from debt-holders and the United Auto Workers union, but concession talks have made little progress with just a couple days left before the initial deadline.

Negotiations between GM and the UAW broke off Friday night but were to resume Sunday, still focusing on exchanging the company's cash payments into a union-run retiree health care trust for GM stock, according to a person briefed on the talks who didn't want to be identified because the bargaining is private.

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"How that restructuring comes is something that has to be determined," Axelrod said. "But it's going to be something that's going to require sacrifice not just from the auto workers but also from creditors, from shareholders and the executives who run the company. And everyone's going to have to get together here to build companies that can compete in the future."

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Read more: http://news.yahoo.com/s/ap/20090215/ap_on_go_pr_wh/obama_autos

[The Brethren]

1. I have very little sympathy for GM.

Let them fall on their faces like they should've done with Wall Street.



The Stimulus Plan ("American Recovery and Reinvestment Act of 2009"): Orig. House version -- http://appropriations.house.gov/pdf/RecoveryBill01-15-09.pdf , House spreadsheet -- http://spreadsheets.google.com/ccc?key=pV-c6t5fOVmNorqMpHvnCMw ; Senate version -- http://appropriations.senate.gov/News/2009_02_02_The_American_Recovery_and_Reinvestment_Act_of_2009.pdf ; and Senate compromise -- http://www.govtrack.us/congress/billtext.xpd?bill=h111-1 , Text and $$$ details of Senate compromise -- http://appropriations.senate.gov/News/2009_02_08_UPDATED_Appropriations_Provisions_of_American_Recovery_and_Reinvestment_Act.pdf?CFID=4043629&CFTOKEN=40573040 . In addition to -- http://readthestimulus.org/amdth1.pdf , along with -- http://www.readthestimulus.org/ .

[Winterblues]

2. I am still curious about the repayment plan of AIG

How much did tax payers give them, $150 billion plus I believe. Where is all this concern for this company? GM is to get $9 billion and everyone is really upset about it..:crazy: I guess an insurance company is way more important than the Major Car Company in America.

[Psephos]

3. A good question indeed n/t