WASHINGTON (Dow Jones)--Previewing his looming decision on the U.S. auto industry, U.S. President Barack Obama suggested struggling car makers will receive more federal aid, but added that the money will be contingent on the sector making "some pretty drastic changes."
"We will provide them with some help," Obama said at an interactive town hall meeting in the White House. "I know that it is not popular to provide help to auto workers or to auto companies, but my job is to measure the costs of allowing these auto companies just to collapse versus us figuring out can they come up with a viable plan."
Obama's auto-sector task force has been evaluating General Motors Corp. (GM) and Chrysler LLC to determine whether the firms merit another injection of government cash. The companies have requested $22 billion, including $9 billion for the second quarter.
Obama said the administration would provide extensive details on its stance on the auto makers in the next few days.
Allowing the firms to slide into bankruptcy could cost thousands of jobs across the industrial sector, not just at GM and Chrysler, but at hundreds of dealerships, suppliers and related companies. At the same time, the White House is under pressure not to bail out companies that critics say are a victim of their own mismanagement.
Obama said all parties - shareholders, workers, creditors, suppliers, and dealers - would have to make concessions because the industry's current model, which he said relies on low gas prices, is unsustainable.
"If they're not willing to make the changes and the restructurings that are necessary, then.. I'm not willing to have taxpayers' money chase after bad money," Obama said. "And so a lot of it's going to depend on their willingness to make some pretty drastic changes. And some of those are still going to be painful, because I think you're not going to see a situation where the U.S. auto makers are gaining the kind of share that they had back in the 1950s."
Though he didn't detail a specific remedy for the sector, Obama made clear that he wants it to survive.
"We need to preserve a U.S. auto industry," Obama said. "I think that's important. I think it's important not just symbolically, it's important because the auto industry is a huge employer, not just the people who work for GM or Ford or Chrysler, but all the suppliers, all the ripple effects that are created as a consequence of our auto industry."
Thursday's event, moderated by Vice President Joe Biden's top economic adviser, Jared Bernstein, was billed as the first-ever interactive town-hall meeting by a president. The White House collected more than 104,000 questions from nearly 93,000 people this week. Over 3.6 million votes were cast for which questions should be lobbed at Obama.
The president took questions submitted in writing, as well as via video, and from the live audience, which the White House said was made up of around 100 people, including teachers, nurses and business owners. The event was streamed live over the White House website.
The top questions - on education, homeownership, outsourcing and health care - gave Obama a chance to tout the initiatives his administration has implemented through the $787 billion economic stimulus package or is pushing in its budget blueprint.
Obama said Americans should be "patient and persistent" about the ailing labor market, warning that unemployment is likely to worsen in the months ahead. "I don't think we've lost all the jobs we're going to lose in this recession," he said, adding that the job market is likely to endure a "difficult time" over the next several months, and possibly into next year.
The U.S. has lost 4.4 million jobs since the recession started in December 2007, with almost half of those losses coming in the last three months alone.
For Obama, the town hall meeting is the latest in an aggressive public outreach campaign on his $3.6 trillion budget proposal and the steps the administration is taking to address the economic crisis.
White House spokesman Robert Gibbs said Obama would use the forum to provide another "update" to the American people. "It's a way for the President to do what he enjoys doing out on the road, but saves on gas," Gibbs said Wednesday.
-By Henry J. Pulizzi, Dow Jones Newswires; 202-862-9256; henry.pulizzi@dowjones.com
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=Ia%2B9%2FwQde7iSgF%2FbgehNXw%3D%3D. You can use this link on the day this article is published and the following day.
(END) Dow Jones Newswires
March 26, 2009 13:36 ET (17:36 GMT)
Thursday, March 26, 2009
Obama's Example of Control Over Free Markets
WASHINGTON (Dow Jones)--Previewing his looming decision on the U.S. auto industry, U.S. President Barack Obama suggested struggling car makers will receive more federal aid, but added that the money will be contingent on the sector making "some pretty drastic changes."
"We will provide them with some help," Obama said at an interactive town hall meeting in the White House. "I know that it is not popular to provide help to auto workers or to auto companies, but my job is to measure the costs of allowing these auto companies just to collapse versus us figuring out can they come up with a viable plan."
Obama's auto-sector task force has been evaluating General Motors Corp. (GM) and Chrysler LLC to determine whether the firms merit another injection of government cash. The companies have requested $22 billion, including $9 billion for the second quarter.
Obama said the administration would provide extensive details on its stance on the auto makers in the next few days.
Allowing the firms to slide into bankruptcy could cost thousands of jobs across the industrial sector, not just at GM and Chrysler, but at hundreds of dealerships, suppliers and related companies. At the same time, the White House is under pressure not to bail out companies that critics say are a victim of their own mismanagement.
Obama said all parties - shareholders, workers, creditors, suppliers, and dealers - would have to make concessions because the industry's current model, which he said relies on low gas prices, is unsustainable.
"If they're not willing to make the changes and the restructurings that are necessary, then.. I'm not willing to have taxpayers' money chase after bad money," Obama said. "And so a lot of it's going to depend on their willingness to make some pretty drastic changes. And some of those are still going to be painful, because I think you're not going to see a situation where the U.S. auto makers are gaining the kind of share that they had back in the 1950s."
Though he didn't detail a specific remedy for the sector, Obama made clear that he wants it to survive.
"We need to preserve a U.S. auto industry," Obama said. "I think that's important. I think it's important not just symbolically, it's important because the auto industry is a huge employer, not just the people who work for GM or Ford or Chrysler, but all the suppliers, all the ripple effects that are created as a consequence of our auto industry."
Thursday's event, moderated by Vice President Joe Biden's top economic adviser, Jared Bernstein, was billed as the first-ever interactive town-hall meeting by a president. The White House collected more than 104,000 questions from nearly 93,000 people this week. Over 3.6 million votes were cast for which questions should be lobbed at Obama.
The president took questions submitted in writing, as well as via video, and from the live audience, which the White House said was made up of around 100 people, including teachers, nurses and business owners. The event was streamed live over the White House website.
The top questions - on education, homeownership, outsourcing and health care - gave Obama a chance to tout the initiatives his administration has implemented through the $787 billion economic stimulus package or is pushing in its budget blueprint.
Obama said Americans should be "patient and persistent" about the ailing labor market, warning that unemployment is likely to worsen in the months ahead. "I don't think we've lost all the jobs we're going to lose in this recession," he said, adding that the job market is likely to endure a "difficult time" over the next several months, and possibly into next year.
The U.S. has lost 4.4 million jobs since the recession started in December 2007, with almost half of those losses coming in the last three months alone.
For Obama, the town hall meeting is the latest in an aggressive public outreach campaign on his $3.6 trillion budget proposal and the steps the administration is taking to address the economic crisis.
White House spokesman Robert Gibbs said Obama would use the forum to provide another "update" to the American people. "It's a way for the President to do what he enjoys doing out on the road, but saves on gas," Gibbs said Wednesday.
-By Henry J. Pulizzi, Dow Jones Newswires; 202-862-9256; henry.pulizzi@dowjones.com
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=Ia%2B9%2FwQde7iSgF%2FbgehNXw%3D%3D. You can use this link on the day this article is published and the following day.
(END) Dow Jones Newswires
March 26, 2009 13:36 ET (17:36 GMT)
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