President Wants "Leaner, Meaner" Carmakers

Obama Calls For GM, Chrysler To Emerge From Woes Ready To Embrace New Markets

(AP)  President Barack Obama says General Motors Corp. and Chrysler LLC must emerge from their restructuring as "leaner, meaner" companies and that a substantial market awaits them if they make the right decisions.

Mr. Obama said in an interview broadcast Saturday on the cable television station C-SPAN that the beleaguered automakers should aim to have product lines that appeal to consumers - and that means fuel efficient and high-performance vehicles that Americans hunger for.

He defended government intervention in the industry, saying the administration could not let either company simply dissolve.

"Our auto industry is the foundation for economies all across the Midwest," Mr. Obama said, "and ultimately, for the country as a whole. And had we allowed GM or Chrysler simply to liquidate that would have been a huge anti-stimulus on the economy as a whole, and could have dragged us even deeper into recession or even depression."

The president said that he believes GM ultimately "is going to be a strong company and we are going to be pulling out as soon as the economy recovers and they've completed their restructuring."

Nevertheless, several members of Congress appealed directly to the administration Friday to slow down the restructuring, saying they were worried about shuttered car dealerships, job losses and the big unknown of a GM bankruptcy. They said that a pending June 1 deadline for a GM bankruptcy created more uncertainty for the industry and could lead to a rash of additional job losses and dealership closings.

Chrysler filed for bankruptcy protection last month, and plans to sell the vast majority of its assets to a group led by Italy's Fiat Group SpA and form a new company. A sale hearing is scheduled for May 27, with the deal expected to close about 30 days later.

Ford Motor Co. has so far spared itself from needing a federal bailout after taking steps over the last few years to cut costs, focus on its core brands, and introduce new vehicles and advanced features.

GM borrowed an additional $4 billion from the government Friday on top of $15.4 billion it previously received. The administration has demanded that the restructuring include cutting labor costs, reducing debt, shedding dealerships and brands, and closing excess factories.

"Keep in mind what's happened in the auto industry," Mr. Obama said. "Right now, we're seeing - we're projecting that maybe this year the auto industry as a whole sells 10 million cars in the United States. Well, replacement numbers for the auto industry, you know, that the number of cars to replace cars on the road is closer to 14, 15, 16 million. And what that means is when the economy recovers and consumers say, you know the old clunker has finally given out. I need to get a new car."

"You are looking at a substantial market that is going to be available for U.S. automakers if they've made some good decisions now, and if they are building the kinds of fuel efficient, high performance cars that American consumers are hungry for," he added.

Mr. Obama said he believes the automakers have been "weighed down by a legacy of some bad management decisions, health care costs and the whole host of other things that they are now in the process of cleaning up."

"We're confident that they can emerge and take advantage of that new market and actually be very profitable and thrive," the president said. "But it means going through some pain now, and the thing I worry about most is that so much of that pain is borne by workers and communities that have historically been the backbone of the auto industry and so we're going to have to work intensely with those communities."

"If some of those auto jobs don't come back, then what we're going to have to do is make sure that those workers are effectively retrained," Mr. Obama said.

Click here to watch the entire C-Span interview

[barbaram99]

They use fuel cells in the space program. In 83 I saw a car run on solar pwer panels. The fact is oil will run out. It is important to step up to the plate and make cars that don't use gas. The car companies don't want to as they will have to retool but sooner or later they will be forced to.

[humblethought]

Taxes, taxes, taxes. Isn't it true that some or all of these big three companies contribute far more in U.S. tax revenue every year than what they have asked for in bail out money? The questions isn't how much it costs us to bail them out, but how much it costs us to let them die? Where will the government collect all that payroll tax in future years? Or what national security will we sacrafice to offset the loss of tax income lost when the car companies sink. Are the big three really costing us or are they really paying us?

[hamiltongrad]

Why not mandate that we build 30 Nuclear Energy Plants in the next 5 years. We could do it. France runs on it, and so does the state of Conn. For decades.

Then we could have all the cheap energy we need. One shoe box of material power the city of SF for 5 years , no waste, as all is used for medical imaging tests.

Then we would not be be holding to any ARAB or VENZ. OIL.

It is so simple, that I am sure there are politcal pressures not to.

[nursemark-2009]

If the president wants real change, why not get the car makers to start building fuel cell cars. Fuel call cars have zero pollution, uses no oil from the Arabs and can be built today. Call your congresman and the White House. Free America from foreign oil.

[barbaram99]

I can't drive due to blindness. What we need is less cars on the roads. We need to make cars that are earth friendly . Really the answer is mass transit, ye know bus. What has hurt the car makers is the sact is they use too much gas. The was built to replace the horse. They got tired of creaning up the horse droppings and so they made the car.Walk. i have to. I have to take the bus.

[jim2938]

with all the speculation that consumers have, we have to be hopeful that all these changes will have a positive impact on all of us as consumers; our economy needs a desperate renovation if all of us as citizens and consumers are to survive these economic times; our government is doing these changes so the road to recovery will benefit all of us; we need to look at the bigger picture to understand that correcting the mess that was made by former business executives and politicians warrants immediate action for all of us as citizens and consumers to have a better life.

[taxedmore]

How about calling for a leaner and meaner welfare crowd. Some of the fat cows I get stuck behind in the grocery check out line can barely get between the check outs they are so stuffed with their Food Stamp food that they eat in their subsidized appartments. And they should have money for food if they work at all because they don't have to pay income taxes with their EIC and Child Credits. Come on Obama, billions of somebody's hard earned dollars are going to support this crowd, do something about the welfare crowd and back off the rest of us that are getting taxed to death to pay for it.

[jonesjep]

If they truely want a leaner, meaner company then get rid of the unions. All they have to do is follow the Toyota model. There has never been anything LEAN about the US Government or the UAW.

[ianlou]

GM just got another 4 Billion dollars of our taxpayer money. GM is also paying it's UAW employees 80% of their pay while they are shut down for the 9 weeks this summer. Good friend of mine brags that he will be playing golf and fishing all summer long and using no vacation time to do so. WHEN ARE WE GOING TO STOP BEING SUCKERS TO THE UAW!!!!!
Reply to this comment

Yeah, the entire sales staff of my company have lived on the golf course or on their boats all their working lives, the bas tards

[j_flood]

Wished he'd have complimented Ford for their aggressive work to re-invent themselves to a lean, mean industry leader. And with no bailout or bankruptcy. I'm figuring what Mullaly has done is a result of him being in manufacturing but not from the auto industry.

[reality42]

Obama wants leaner and meaner car companys? no problem let the Markets do there thing and let GM and chrysler go bankrupt and someone will come in and make a meaner leaner car company in the future.
Obama has already wasted billions of tax payers money on these car companys that deserve to go bankrupt

[whitemale08]

...and yet the bailouts for Goldman Sucks, JP Morgan and other BIG FAILED BANKS continues.

[tbbaot]

Mr Obama...Americans want leaner and meaner government, but instead we are stuck with you. Clean your own backyard before you go meddling with the private sector.

[dfnj2009]

Let GM die! GM is the worst managed company in American history. Wagner's lavish pension is valued at $22 million. No company should be allowed to continue to stay in business when executives are getting such lavish pensions!!! PURE INSANITY!!!!

[rwsmith29456]

To American car companies, being 'leaner and meaner' means selling the public even less quality than they do now for more money.

[babooph]

Instead of "outsourcing" labor ,lets get those Chinese managers -for 1/100th the cost they are competent in banking ,insurance ,auto mfg,& other that our crooked overpaid CEO bunch failed at.[No need to pay those massive BONUS checks to all those losers].

[andylance1]

Cars with top economy or hybrids can not charge a premium of an additional five thousand dollars per vehicle and expect the public to embrace the new technology. In today's economy people pick value first of all, and hybrids make no sense with the additional cost.

Obama deserves praise for how he has handled the restructuring of the auto industry. There is reason for optimism that the Chrysler - Fiat partnership will provide us with economical vehicles that are affordable and American made. I fear that General Motors is doomed regardless of what is done to save it because of the corporate culture of ineptitude.

[sjc_1]

golfered2,

I have taken 4 semesters of economics and have enough to get a BA in economics. With and econometrics class, I could get a BS in economics, so do NOT lecture me on any of this.

[globalcoolin]

Obama! You should want a lean and mean Armed Force. Corperations are not suposed to be what the cammander in chief wants, you stupid dictator!

[endrepubs]

'Leaner, Meaner'. Sounds kind of like a Republican wet dream. (Actually, I mean the Republican party of 40 years ago).