Sunday, March 29, 2009

Obama To Give Automakers New Deadlines

The Obama administration doesn't seem to want to let the automakers tank but they don't appear to be getting the work done, or they just haven't had enough time. Obama is expected to talk about the automakers first thing in the morning.
WSJ: The administration is not expected on Monday to deliver a comprehensive blueprint for where the industry needs to go in the months and years ahead. Instead, administration officials said, the announcement will lay out the parameters of an overall deal, including some firm deadlines. The administration is expected to hold out the threat of having the companies enter into Chapter 11 bankruptcy restructuring if certain tough compromises are not made over the next month.

The original December loans were given under the agreement that all sides would strike a compromise deal by March 31, but the administration is taking advantage of a clause allowing all sides another month to negotiate.

"It was unrealistic to renegotiate a new labor agreement and the unsecured debt in so short a time," said Sean McAlinden, chief economist with the Ann Arbor, Mich.-based Center for Automotive Research. "That has never happened before."

GM and Chrysler are meant to submit by Tuesday assessments of where their restructuring efforts are heading. In February, both companies put forward plans for paring back their operations, reducing their workforces and eliminating vehicle models. Chrysler is mulling a potential alliance with Italy's Fiat SpA.