Restructing plans are being finished this weekend.
Late Friday afternoon as the Auto Task Force was working over the restructuring plans of Chrysler and General Motors, the President’s press secretary, Robert Gibbs, confirmed that on Monday the President will speak about his requirements for continued aid for the automakers. This followed at least two meetings between the Auto Task Force and the President on Thursday. Gibbs said the Task Force was “winding down the decisions that have to be made and putting in place a plan.”
On Thursday, President Obama confirmed his belief that America needed a viable auto industry, but that viability means being able to compete in a global environment and not depend on truck sales for profits. Gibbs said the companies must be able to compete without continued government assistance.
President Obama was sharply critical of the management of the auto companies since they did not invest in technologies that would have allowed a broader array of cars that they could sell in good times as well as the current bad ones.
Both the President and Gibbs have acknowledged that the current annual selling rate of 9 million vehicles would challenge any company since sales were at only a little more than half the usual rate. U.S. taxpayers have already lent Chrysler and GM $17.4 billion, and the companies have requested another $22 billion to carry them until their restructurings take effect.
The President is at Camp David for the weekend, but is due back Sunday afternoon for more meetings prior to Monday’s announcement and a trip to London for a meeting on the global economy with the heads of the Group of Twenty nations.
The G20 is made up of Finance Ministers and Central Bank Governors, and was established in 1999 to bring together industrialized and developing economies to discuss key issues in the global economy. The U.S. Treasury has been critical about the ongoing reluctance of European governments in particular to stimulate economic demand through deficit spending on a scale large enough to be effective. The U.S. is preparing to spend $3.6 trillion to do so, but wants other participants in the global economy to do much more than they have thus far.
“The President, I think, will outline what he thinks is the best way forward to achieve viability for the companies in both that short term and in the long term, Gibbs said. “How do these companies get through the global recession that sees a great decrease in demand for the product? And how, when we emerge from recession to recovery, how do we have a sustainable path that makes good business decisions not just for one year but for many years?”
We’ll know the President’s plan on Monday.