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Better Believe It Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Mar-30-09 11:08 AM
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Obama's Remarks On Auto Industry Restructuring - Full Transcript
Source: White House

Obama's Remarks On Auto Industry Restructuring, March 30, 2009 President Obama is giving General Motors and Chrysler weeks to restructure or face bankruptcy. Read his prepared remarks. Source: The White House

One of the challenges we have confronted from the beginning of this administration is what to do about the state of our struggling auto industry. In recent months, my Auto Task Force has been reviewing requests by General Motors and Chrysler for additional government assistance as well as plans developed by each of these companies to restructure, modernize, and make themselves more competitive. Our evaluation is now complete. But before I lay out what needs to be done going forward, I want to say a few words about where we are, and what led us to this point.

It will come as a surprise to no one that some of the Americans who have suffered most during this recession have been those in the auto industry and those working for companies that support it. Over the past year, our auto industry has shed over 400,000 jobs, not only at the plants that produce cars but at the businesses that produce the parts that go into them, and the dealers that sell and repair them. More than one in ten Michigan residents is out of work the most of any state. And towns and cities across the great Midwest have watched unemployment climb higher than it's been in decades.

The pain being felt in places that rely on our auto industry is not the fault of our workers, who labor tirelessly and desperately want to see their companies succeed. And it is not the fault of all the families and communities that supported manufacturing plants throughout the generations. Rather, it is a failure of leadership from Washington to Detroit that led our auto companies to this point.

Year after year, decade after decade, we have seen problems papered-over and tough choices kicked down the road, even as foreign competitors outpaced us. Well, we have reached the end of that road. And we, as a nation, cannot afford to shirk responsibility any longer. Now is the time to confront our problems head-on and do what's necessary to solve them.

We cannot, we must not, and we will not let our auto industry simply vanish. This industry is, like no other, an emblem of the American spirit; a once and future symbol of America's success. It is what helped build the middle class and sustained it throughout the 20th century. It is a source of deep pride for the generations of American workers whose hard work and imagination led to some of the finest cars the world has ever known. It is a pillar of our economy that has held up the dreams of millions of our people. But we also cannot continue to excuse poor decisions. And we cannot make the survival of our auto industry dependent on an unending flow of tax dollars. These companies and this industry must ultimately stand on their own, not as wards of the state.

That is why the federal government provided General Motors and Chrysler with emergency loans to prevent their sudden collapse at the end of last year only on the condition that they would develop plans to restructure. In keeping with that agreement, each company has submitted a plan to restructure. But after careful analysis, we have determined that neither goes far enough to warrant the substantial new investments that these companies are requesting. And so today, I am announcing that my administration will offer GM 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; a period during which they must produce plans that would give the American people confidence in their long-term prospects for success.

What we are asking is difficult. It will require hard choices by companies. It will require unions and workers who have already made painful concessions to make even more. It will require creditors to recognize that they cannot hold out for the prospect of endless government bailouts. Only then can we ask American taxpayers who have already put up so much of their hard-earned money to once more invest in a revitalized auto industry. But I am confident that if we are each willing to do our part, then this restructuring, as painful as it will be in the short-term, will mark not an end, but a new beginning for a great American industry; an auto industry that is once more out-competing the world; a 21st century auto industry that is creating new jobs, unleashing new prosperity, and manufacturing the fuel-efficient cars and trucks that will carry us toward an energy independent future. I am absolutely committed to working with Congress and the auto companies to meet one goal: the United States of America will lead the world in building the next generation of clean cars.

No one can deny that our auto industry has made meaningful progress in recent years. Some of the cars made by American workers are now outperforming the best cars made abroad. In 2008, the North American Car of the Year was a GM. This year, Buick tied for first place as the most reliable car in the world. And our companies are investing in breakthrough technologies that hold the promise of new vehicles that will help America end its addiction to foreign oil.

But our auto industry is not moving in the right direction fast enough to succeed. So let me discuss what measures need to be taken by each of the auto companies requesting taxpayer assistance, starting with General Motors. While GM has made a good faith effort to restructure over the past several months, the plan they have put forward is, in its current form, not strong enough. However, after broad consultations with a range of industry experts and financial advisors, I'm confident that GM can rise again, provided that it undergoes a fundamental restructuring. As an initial step, GM is announcing today that Rick Wagoner is stepping aside as Chairman and CEO. This is not meant as a condemnation of Mr. Wagoner, who has devoted his life to this company; rather, it's a recognition that it will take a new vision and new direction to create the GM of the future.

In this context, my administration will offer General Motors adequate working capital over the next 60 days. During this time, my team will be working closely with GM to produce a better business plan. They must ask themselves: have they consolidated enough unprofitable brands? Have they cleaned up their balance sheets or are they still saddled with so much debt that they can't make future investments? And above all, have they created a credible model for how to not only survive, but succeed in this competitive global market? Let me be clear: the United States government has no interest or intention of running GM. What we are interested in is giving GM an opportunity to finally make those much-needed changes that will let them emerge from this crisis a stronger and more competitive company.

The situation at Chrysler is more challenging. It is with deep reluctance but also a clear-eyed recognition of the facts that we have determined, after a careful review, that Chrysler needs a partner to remain viable. Recently, Chrysler reached out and found what could be a potential partner the international car company Fiat, where the current management team has executed an impressive turnaround. Fiat is prepared to transfer its cutting-edge technology to Chrysler and, after working closely with my team, has committed to building new fuel-efficient cars and engines here in America. We have also secured an agreement that will ensure that Chrysler repays taxpayers for any new investments that are made before Fiat is allowed to take a majority ownership stake in Chrysler.

Still, such a deal would require an additional investment of tax dollars, and there are a number of hurdles that must be overcome to make it work. I am committed to doing all I can to see if a deal can be struck in a way that upholds the interests of American taxpayers. That is why we will give Chrysler and Fiat 30 days to overcome these hurdles and reach a final agreement and we will provide Chrysler with adequate capital to continue operating during that time. If they are able to come to a sound agreement that protects American taxpayers, we will consider lending up to $6 billion to help their plan succeed. But if they and their stakeholders are unable to reach such an agreement, and in the absence of any other viable partnership, we will not be able to justify investing additional tax dollar to keep Chrysler in business.

While Chrysler and GM are very different companies with very different paths forward, both need a fresh start to implement the restructuring plans they develop. That may mean using our bankruptcy code as a mechanism to help them restructure quickly and emerge stronger. Now, I know that when people even hear the word "bankruptcy" it can be a bit unsettling, so let me explain what I mean. What I am talking about is using our existing legal structure as a tool that, with the backing of the U.S. government, can make it easier for General Motors and Chrysler to quickly clear away old debts that are weighing them down so they can get back on their feet and onto a path to success; a tool that we can use, even as workers are staying on the job building cars that are being sold. What I am not talking about is a process where a company is broken up, sold off, and no longer exists. And what I am not talking about is having a company stuck in court for years, unable to get out.

It is my hope that the steps I am announcing today will go a long way toward answering many of the questions people may have about the future of GM and Chrysler. But just in case there are still nagging doubts, let me say it as plainly as I can if you buy a car from Chrysler or General Motors, you will be able to get your car serviced and repaired, just like always. Your warrantee will be safe. In fact, it will be safer than it's ever been. Because starting today, the United States government will stand behind your warrantee.

But we must also recognize that the difficulties facing this industry are due in no small part to the weakness in our economy. Therefore, to support demand for auto sales during this period, I'm directing my team to take several steps. First, we will ensure that Recovery Act funds to purchase government cars go out as quickly as possible and work through the budget process to accelerate other federal fleet purchases as well. Second, we will accelerate our efforts through the Treasury Department's Consumer and Business Lending Initiative. And we are working intensively with the auto finance companies to increase the flow of credit to both consumers and dealers. Third, the IRS is today launching a campaign to alert consumers of a new tax benefit for auto purchases made between February 16th and the end of this year if you buy a car anytime this year, you may be able to deduct the cost of any sales and excise taxes. This provision could save families hundreds of dollars and lead to as many as 100,000 new car sales.

Finally, several members of Congress have proposed an even more ambitious incentive program to increase car sales while modernizing our auto fleet. Such fleet modernization programs, which provide a generous credit to consumers who turn in old, less fuel efficient cars and purchase cleaner cars have been successful in boosting auto sales in a number of European countries. I want to work with Congress to identify parts of the Recovery Act that could be trimmed to fund such a program, and make it retroactive starting today.

Let there be no doubt, it will take an unprecedented effort on all our parts from the halls of Congress to the boardroom, from the union hall to the factory floor to see the auto industry through these difficult times. But I want every American to know that the path I am laying out today is our best chance to make sure the cars of the future are built where they've always been built in Detroit and across the Midwest; to make America's auto industry in the 21st century what it was in the 20th century unsurpassed around the world. This path has been chosen after consulting with other governments that are facing this crisis. We have worked closely with the Government of Canada on GM and Chrysler, as both companies have extensive operations there. The Canadian Government has indicated its support for our approach and will be announcing their specific commitments later today.

While the steps I am talking about will have an impact on all Americans, some of our fellow citizens will be affected more than any others. And so I'd like to speak directly to all those men and women who work in the auto industry or live in the countless communities that depend on it. Many of you have been going through tough times for longer than you'd care to remember. And I will not pretend the tough times are over. I cannot promise you there isn't more pain to come. But what I can promise you is this I will fight for you. You are the reason I am here today. I got my start fighting for working families in the shadows of a shuttered steel plant and I wake up every single day asking myself what I can do to give you and working people all across this country a fair shot at the American dream.

When a community is struck by a natural disaster, the nation responds to put it back on its feet. While the storm that's hit our auto towns is not a tornado or a hurricane, the damage is clear, and we must respond. That is why today, I am designating a new Director of Recovery for Auto Communities and Workers to cut through red tape and ensure that the full resources of our federal government are leveraged to assist the workers, communities, and regions that rely on our auto industry. Edward Montgomery, a former Deputy Labor Secretary, has agreed to serve in this role. Together with Labor Secretary Solis and my Auto Task Force, Ed will help provide support to auto workers and their families, and open up opportunity in manufacturing communities. Michigan, Ohio, Indiana, and every other state that relies on the auto industry will have a strong advocate in Ed. He will direct a comprehensive effort that will help lift up the hardest hit areas by using the unprecedented levels of funding available in our Recovery Act and throughout our government to create new manufacturing jobs and new businesses where they are needed most in your communities. And he will also lead an effort to identify new initiatives we may need to help support your communities going forward.

These efforts, as essential as they are, will not make everything better overnight. There are jobs that cannot be saved. There are plants that will not reopen. And there is little I can say that can subdue the anger or ease the frustration of all whose livelihoods hang in the balance because of failures that weren't theirs.

But there is something I want everyone to remember. Remember that it is precisely in times like these in moments of trial, and moments of hardship that Americans rediscover the ingenuity and resilience that makes us who we are. That made the auto industry what it once was. That sent those first mass-produced cars rolling off assembly lines. That built an arsenal of democracy that propelled America to victory in the Second World War. And that powered our economic prowess in the first American century.

Because I know that if we can tap into that same ingenuity and resilience right now; if we can carry one another through this difficult time and do what must be done; then we will look back and say that this was the moment when America's auto industry shed its old ways, marched into the future, and remade itself, once more, into an engine of opportunity and prosperity, not only in Detroit, and not only in our Midwest, but all across America.

- The above is the transcript of President Obama's public statement and is not copyrighted material -

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Soylent Brice Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Mar-30-09 11:17 AM
Response to Original message
1. ...

curious how this one will go...
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BrklynLiberal Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Mar-30-09 11:34 AM
Response to Reply #1
4. 12 of my favorite movies of all time...
in The Kid, Willis also meets himself as a child...

and it seems that he likes movie titles with numbers.
The First Deadly Sin
Diehard 2
Four Rooms
The Fifth Element
The Sixth Sense
The Whole Nine Yards/ Ten Yards
Oceans Twelve
16 Blocks

This does not include first, last, final etc.
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Soylent Brice Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Mar-30-09 12:26 PM
Response to Reply #4
15. same here. anything by terry gilliam.
i wonder what his take on the economy is...

obviously a little concern is showing...
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BrklynLiberal Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Mar-30-09 02:33 PM
Response to Reply #15
19. YES!! Terry Gilliam!!!
Has been off and on to write and direct a movie adaptation of Alan Moore and Dave Gibbons's graphic novel "Watchmen." Gilliam has said he attempted to write an accurate screenplay but it would be unfilmable, but he would consider directing it if it were made into 10 or 12-part cable television series.

Guess everyone does not share his perfectionism.. /


He is now a British citizen.
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Soylent Brice Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Mar-30-09 03:26 PM
Response to Reply #19
21. haven't seen watchmen yet. i heard good things from friends though.
can't even begin to imagine what it would have been like had he written/directed it.

brazil is great but i actually enjoy adventures of baron munchausen too. i think i'm the only one.
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BrklynLiberal Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Mar-30-09 05:33 PM
Response to Reply #21
23. I saw it on TV a couple of times. It was good..
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madrchsod Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Mar-30-09 11:27 AM
Response to Original message
2. "where have you gone lee iacocca....
the weary nation turns its eye to you".....

the Chrysler bailout worked and this one has a chance. if it does`t, obama will reap the whirlwind.
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Aloha Spirit Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Mar-30-09 11:34 AM
Response to Original message
3. So basically, they had three months to provide a serious restructuring plan and they failed, so
we're going to make sure they develop a viable business plan.
Sounds right to me.
These are the same executives that used to brag about not caring about fuel efficiency or how global warming affects the auto industry.
Anyway, I strongly support having someone, Edward Montgomery, to make sure communities get as much support as possible from the government.
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Better Believe It Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Mar-30-09 11:54 AM
Response to Reply #3
7. A clear decision by Obama to attack the auto workers and their union demanding even more
cuts in pay, health care benefits and pensions. Obama and his "task force" are basically demanding that the conditions of union auto workers be reduced to that of the non-union foreign auto makers in Alabama and if the auto workers resist he is prepared to let the domestic auto industry go belly up.

Obama: "It will require unions and workers who have already made painful concessions to make even more."

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Johnboi70 Donating Member (114 posts) Send PM | Profile | Ignore Mon Mar-30-09 12:03 PM
Response to Reply #7
9. An attack on the auto workers would be what the Republicants wanted... failure of GM.
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Jennicut Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Mar-30-09 12:19 PM
Response to Reply #7
12. Well he got Chrysler to partner with another company to save it and save jobs!
BBI, I think he really does not want these industries to fail but is trying extensively to get the best leadership in there as possible. The UAW wants there to be a new CEO.
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FailureToCommunicate Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Mar-30-09 11:42 AM
Response to Original message
5. Wish Obama had shortened a few Wall Streeters of their heads. At least Detroit
makes things. Come on Geithner! Go french revolution on hedge fund companies!
Thanks for posting the speech.
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shaniqua6392 Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Mar-30-09 11:53 AM
Response to Original message
6. Looks like Obama's pressure on these people has prompted
Fiat to agree to a partnership with Chrysler. Within 2 hours of Obama's speech, a deal has been announced between the two. Hopefully, this will all be for the best and our auto companies can emerge stronger than ever.
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hugo_from_TN Donating Member (895 posts) Send PM | Profile | Ignore Mon Mar-30-09 12:26 PM
Response to Reply #6
14. I think Fiat will suck a few billion from the Feds then bail out.
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Johnboi70 Donating Member (114 posts) Send PM | Profile | Ignore Mon Mar-30-09 12:00 PM
Response to Original message
8. Brilliant. nt
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NJmaverick Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Mar-30-09 12:03 PM
Response to Original message
10. Obama speaks to Americans like adults
and tells us what we need to hear. Sadly, I am not sure this is the best approach. I don't know if America has the maturity or sophistication for this kind of dialog.
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Hardrada Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Mar-30-09 11:24 PM
Response to Reply #10
25. Americans have built-in ADD for this kind of thing.
That's because nobody reads much of anything very analytical or historical. Or reads.
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notadmblnd Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Mar-30-09 12:14 PM
Response to Original message
11. Sounds to me like there's one dialog for the wealthy and another for the struggling worker.
Edited on Mon Mar-30-09 12:14 PM by notadmblnd
bank workers salaries are justified, we need to retain them, auto workers make too much, need to give up more, they're lives are expendable.

what happened to the plan to allow us to access our 401K's?
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dflprincess Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Mar-30-09 12:19 PM
Response to Reply #11
13. You have to wonder why the auto workers contracts are not as
sacred as ones that guarantee executives' bonuses.

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zalinda Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Mar-30-09 12:41 PM
Response to Reply #13
16. Well, it's obvious
Obama says they're not. After all auto workers ONLY work with their hands, they are unskilled, while bankers work their minds so they must be much more valuable.

And, I have to ask, why weren't the bankers given 3 months to come up with a solution, and their workers asked to give a pay cut?

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NewDenverDem Donating Member (1 posts) Send PM | Profile | Ignore Mon Mar-30-09 12:49 PM
Response to Original message
17. I call bullshit!
I'm a big supporter of Obama and I agree with this move. However, it also reeks of hypocrisy. How can he have lunch with the big bank CEO's on Friday, the same ones that were entirely complacent in this financial meltdown, and yet not also demand their resignations. Why are lawyers and accountants on Wall Street protected, yet the manufacturing sector is left to feel the brunt of bad decisions alone?
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Vidar Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Mar-30-09 02:03 PM
Response to Original message
18. How about restructuring Wall Street, Mr. Obama. They've done far more harm.
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Kolesar Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Mar-30-09 02:51 PM
Response to Original message
20. No mention of health care costs and its affect on our automakers' competitiveness
No mention of providing health care benefits for those who are sure to be terminated during this automobile market implosion.
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Mithreal Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Mar-30-09 03:30 PM
Response to Reply #20
22. And some argue he is speaking to us like we are adults. nt
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gulfcoastliberal Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Mar-30-09 05:57 PM
Response to Original message
24. We need a party that represents the average American. The "new dem" party has no concern for
workers and good paying blue-collar jobs. Both dems & repukes are totally beholden to maintaining a kleptocratic fascist system.
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