WASHINGTON (CN) - President Obama refused further long-term federal bailouts for General Motors and Chrysler, Monday, asserting unprecedented government control over the auto industry, rejecting the companies' turnaround plans, and raising the prospect of controlled bankruptcy for either auto giant.
The President indicated that neither automaker has proposed sweeping enough changes to justify further large bailouts, and demanded that the manufaturers extract "painful concessions" from creditors, unions and others to survive. Obama showed the extent to which the government is now dictating terms to GM and Chrysler in forcing the departure of Rick Wagoner as CEO of GM, and in warning it may allow either or both companies to fail.
The President also has committed to federal, aka taxpayer, back up the automakers' warranties if they go bankrupt. The automakers may be putting some money into the warranty fund.
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