(CEP News) - U.S. automakers GM and Chrysler must consider the option of bankruptcy, even if for a short period of time, U.S. President Barack Obama said on Monday.

Each automaker had been asked to submit viability programs to the U.S. government to retain billions of dollars in funding. On Monday, Obama said those plans were not sufficient. GM now has 60 days to restructure its plans, while Chrysler has been given 30 days.

“I’m confident if each are willing to do their part ¥ then this restructuring, as painful as it will be in the short term … will mark the beginning, not the end, of a great American auto industry,” Obama said.

Further action on the companies’ part is needed, including more concessions from auto company workers and unions, he said.

Also, creditors to the sector have to realize they are not going to be supported by an endless flow of U.S. tax dollars, Obama noted. He said the U.S. government will work to increase access to private credit for car dealers and consumers.

The U.S. auto industry must be a world leader in the creation of fuel efficient, environmentally friendly cars, he said, noting that the resignation of GM CEO Rick Wagoner, pushed by Washington, symbolizes that “a new vision is necessary.”

By Megan Ainscow, mainscow@economicnews.ca, edited by Sarah Sussman, ssussman@economicnews.ca

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Posted in Categories: Australia, Auto, Economy, Releases, USA.

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