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Obama Auto Industry Plan


Obama Administration Auto Industry Plan




GENERAL MOTORS CORP.


  • President Barack Obama's auto task force determined that General Motors has not presented a viable plan that would succeed.

  • Top executive Rick Wagoner will step down as chairman and chief executive. Kent Kresa, a GM board member, will serve as interim chairman and current president Fritz Henderson will serve as chief executive.

  • The administration is willing to give GM adequate working capital for 60 days to develop a more aggressive restructuring plan.

  • The company's stakeholders - unions, bondholders and others - will need to make sacrifices.

  • Using the bankruptcy code "in a quick and surgical way" could be employed to help revitalize General Motors.





CHRYSLER


  • The task force has concluded that Chrysler is not viable as a standalone company.

  • The administration will provide Chrysler with working capital for 30 days to conclude an alliance with Fiat SpA, an Italian automaker.

  • If successful, the government will consider investing up to $6 billion to help the partnership between Chrysler and Fiat succeed.

  • If the agreement is not reached, the government will not invest any additional taxpayer funds in Chrysler.

  • The company's stakeholders - unions, bondholders and others - will need to make sacrifices.

  • Employing the bankruptcy code "in a quick and surgical way" could be used to help revitalize Chrysler.





CONSUMERS


  • The administration will protect consumer warranties from General Motors and Chrysler vehicles.

  • The plan includes an incentive program meant to increase car sales. Obama will work with Congress to use parts of the economic stimulus package to fund a program that would give consumers a "generous credit" when they replace an older, less fuel-efficient car and buy a new, cleaner vehicle.

  • The Internal Revenue Service will launch a campaign to alert consumers of a new tax benefit for auto purchases between Feb. 16 and the end of the year. Consumers may be able to deduct the cost of any sales and excise taxes, a provision that could lead to has many as 100,000 new car sales.