The “formal” news will come out tomorrow, but Rattner and his know-nothing auto czars are sending the GM/Chrysler execs back to the drawing board for another 30 days to come up with a more aggressive plan. … well, the remaining execs, that is.
The Obama administration autos task force on Monday rejected the turnaround plans of General Motors Corp and Chrysler LLC and warned both could be put through bankruptcy to slash debts.
The announcement by the White House autos panel headed by former investment banker Steve Rattner marked a stunning reversal for management at both automakers and for GM investors and creditors who had bet on a softer line.
“We have unfortunately concluded that neither plan submitted by either company represents viability and therefore does not warrant the substantial additional investments that they requested,” said a senior administration official, who asked not to be named.
Instead of granting GM’s request for up to $30 billion in loans, the administration only pledged to fund GM’s operations for the next 60 days while the top U.S. automaker develops an even more sweeping restructuring plan under new leadership.
They called Chrysler “unrealistic or overly optimistic”. Or were they talking about Obama’s budget and his economic projections for recovery? Hard to tell, eh? The Obama power czars are pushing for a merger with Fiat.
Meanwhile, Rick Wagoner’s messy departurefrom GM under pressure from a sitting President (does reading that make anyone else as queasy as me??) will be filled by Fritz Henderson, the currrent GM
President and Chief Operating Officer. Oddly enough, he’s the architect of the current plan being rejected. huh? He’s supposed to work closely with the Obama czars on a more “aggressive” restructuring.
But a quick bankruptcy is still an option on the table.
The official said the Obama administration had not ruled out a structured, quick bankruptcy process for either GM or Chrysler. Such a process, he said, could shed debt at a time when GM bondholders and Chrysler’s bank have held out against concessions.
“Think of it as a quick rinse,” the senior official said. “It would be very, very short. Potentially as little as 30 days. The companies would emerge from the other side very quickly.”
Vietnam era Navy wife, indy/conservative, and an official California escapee now residing as a red speck in the sea of Oregon blue.
Yeah, that’s what I want to own: a GM auto built under the direction of an Obama appointee. Kind of reminds me of the Soviets building FIATS and calling them LADAS.
And the UAW is going to do what???? Any concessions for the UAW???
Just three months ago, almost everyone in government and the auto industry was saying that “bankruptcy is not an option,” so what changed? Which czar saw the light?
At least we didn’t waste another 10 or 15 billion dollars (yet) before at least considering the option. But hey, were only talking billions here; nowadays that’s chump change.
It just occurred to me – chump change must be the change Obama keeps talking about.
This doesn’t look good, and I’m getting queasy too!
Jeff V
And this from someone who has never run a lemonade stand …
Let me say right up front whenever the Obama administration makes a decision I automatically ask “What’s in in it for them, what dirty trick are they trying to pull on regular Americans”
Ok so here’s what I think.
The top selling vehicles in the US so far in 2009 are
#1) Ford F150 Pick Up … 2) Chevy Silverado Pick Up … #3) Dodge Ram Pick Up.
Link: http://www.walletpop.com/blog/2009/02/23/best-selling-american-cars-for-2009-the-list-might-surprise-yo/
We Americans aint supposed to be buying these gas guzzlers, (Obama doesn’t care if you run a business and need one, or if you have a camper or trailer to haul around) we are expected to buy ‘green vehicles’ teeny tiny cars (kids, dog, granny, shopping all crammed together in the small rear seat) cars with teeny tiny wheels (tires fully inflated) that are earth friendly and creep along using earth friendly fuel…..Bottom line guys Americans are not on board with this ‘Green car’ thing so our ‘dear leader’ is going to confiscate the manufacturer and make sure they force you to see the light (if you can still afford light after ‘dear leader gets thru reorginizing energy)…. GM’s Rick Wagoner is in cahoots with Americans by making the gas guzzling vehicles Americans want to buy so its ‘hit the road Jack and take your gas guzzing restructuring ideas with you and let the government reorganize this industry to build mostly ‘earth friendly green cars’ and for force these pesky Americans to give up their trucks and SUVs.
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@philly_nj,
I think you hit the nail on the head. Obama is ALL about ulterior motive, so you can bet that no “restructuring” plan will be acceptable until the auto manufacturers meet some arbitrary requirements – and I’d even go so far as to say the requirements will be even more reaching than the newest set of government mandates for the industry.
Jeff V
It’s a shame that we can’t require Obama and Geithner to submit *their* proposals (budget and financial bailout, respectively) to a similar *outside* agency before we cough up more tax money or allow the Treasury to print more money.
Yes, I know that Congress is supposed to do that very thing for the budget, and the Fed (FOMC – Federal Open Market Committee, currently under Bernanke) has the same responsibility for the money supply; it’s just that they seem to have reached the pinnacle of dysfunctionality, and something needs to be done to fix them.
Just my two cents’ worth – it’s all I can afford anyway.
Jeff V
ruaqtpi2,
I could have said it more simly …. General Motors will morph into: GM (Government Motors) a union run government supported venture building cars the Obama administration wants Americans to buy….and after wating $$billions of taxpayers money Government Motors will fail because some foreign manufacturer will jump in and produce the cars Americans want to buy.
But like I said I want to make it clear I question ever move Obama makes (with or without a teleprompter :).
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Awesome, so now the extended warranty I pay for every month, is backed by ME, who pays their taxes every paycheck. Just wonderul. OMG! I never thought I could be THIS MAD!
Apparently Obama doesn’t vet his czars any better than his cabinet members.