Speaking on CBS’s “Face the Nation” Sunday, President Obama said he is prepared to give struggling U.S. automakers, General Motors Corp. (GM) and Chrysler LLC, billions more in aid, but only if they show that they are ready to make sacrifices to assure the companies have a viable future.
The industry, he said, must “take serious restructuring steps now in order to preserve a brighter future down the road.” The two companies “are not there yet,” he added.
On Monday, President Obama will lay out the administration’s interim conclusions on the companies’ viability and the many steps that need to be taken to return the companies to health. The president is likely to hold off on granting new loans to preserve leverage in ongoing negotiations, particularly with the thousands of bondholders who hold a total of about $28 billion in GM debt. The government is pressuring the bondholders to agree to an equity swap that would reduce GM’s debt load by two-thirds. [via WSJ]