MSNBC: When General Motors Chairman and CEO Rick Wagoner leaves the automaker, he'll take with him a financial package worth an estimated $23 million.Obama tells auto workers: "I will fight for you. You're the reason I'm here today." Obama appointed Edward Montgomery, director of recovery for auto workers and communities, to cut through the red tape to use stimulus funding to create new manufacturing jobs. Here is the announcement that Chrysler and GM just aren't cutting it:
The terms of General Motors Corp.'s government loans prevent it from giving executives severance pay, but they don't affect earned pensions.
White House's Auto Task Force findings:
Viability of Existing Plans: The plans submitted by GM and Chrysler on February 17, 2009 didRead more about Chrysler and GM viability and warranties for those GMs and Chryslers you own here.
not establish a credible path to viability. In their current form, they are not sufficient to justify a
substantial new investment of taxpayer resources. Each will have a set period of time and an adequate amount of working capital to establish a new strategy for long-term economic viability.
• General Motors: While GM’s current plan is not viable, the Administration is confident that with a more fundamental restructuring, GM will emerge from this process as a stronger more competitive business. This process will include leadership changes at GM and an increased effort by the U.S.
Treasury and outside advisors to assist with the company’s restructuring effort. Rick Wagoner is
stepping aside as Chairman and CEO. In this context, the Administration will provide GM with working capital for 60 days to develop a more aggressive restructuring plan and a credible strategy to implement such a plan. The Administration will stand behind GM’s restructuring effort.
• Chrysler: After extensive consultation with financial and industry experts, the Administration has reluctantly concluded that Chrysler is not viable as a stand-alone company. However, Chrysler has reached an understanding with Fiat that could be the basis of a path to viability. Fiat is prepared to transfer valuable technology to Chrysler and, after extensive consultation with the Administration,
has committed to building new fuel efficient cars and engines in U.S. factories. At the same time, however, there are substantial hurdles to overcome before this deal can become a reality.
Therefore, the Administration will provide Chrysler with working capital for 30 days to conclude a definitive agreement with Fiat and secure the support of necessary stakeholders. If successful, the government will consider investing up to the additional $6 billion requested by Chrysler to help this
partnership succeed. If an agreement is not reached, the government will not invest any additional taxpayer funds in Chrysler.
• A Fresh Start to Implement Aggressive Restructurings: While Chrysler and GM are different companies with different paths forward, both have unsustainable liabilities and both need a fresh start. Their best chance at success may well require utilizing the bankruptcy code in a quick and surgical way. Unlike a liquidation, where a company is broken up and sold off, or a conventional bankruptcy, where a company can get mired in litigation for several years, a structured bankruptcy
process – if needed here – would be a tool to make it easier for General Motors and Chrysler to clear away old liabilities so they can get on a path to success while they keep making cars and
providing jobs in our economy. Read more here.
Americans say let 'em die. Those would be the Americans who don't live in Detroit.