Obama hopeful Chrysler, GM will emerge

April 30, 2009
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, WASHINGTON, April 30 – President Barack Obama said late on Wednesday he was confident that both Chrysler and General Motors would emerge stronger from the US auto industry\’s crisis as restructuring deadlines loomed.

Chrysler faces a Thursday evening deadline to come up with a viability plan to get continued federal emergency loans, and Obama said that even if it does go into bankruptcy, it could soon emerge "in a much stronger position."

"I am actually very hopeful, more hopeful than I was 30 days ago, that we can see a resolution that maintains a viable Chrysler auto company," he told a news conference, after casting doubt on Chrysler\’s survival earlier in the day.

The details of a marriage between Chrysler and Italy\’s Fiat "have not yet been finalized, so I don\’t want to jump the gun," Obama added.

"But I am feeling more optimistic than I was about the possibilities of that getting done," he said, noting that Chrysler\’s major creditors had made concessions to get repayment on reduced terms.

Under a preliminary deal signed in January, Fiat would initially take a 20 percent stake which would then rise to 35 percent and could eventually reach 51 percent.

Fiat would pay nothing, but would provide access for Chrysler to its technology, notably for smaller, more economical vehicles.

If all else fails, Chrysler had made "prudent" preparations to go into bankruptcy restructuring, Obama said.

"It\’s not clear that they\’ll have to use it," he said, but any Chapter 11 reorganization for the number three US automaker would be rapid.

"The fact that the major debt holders appear ready to make concessions means that even if they ended up having to go through some sort of bankruptcy, it would be a quick type of bankruptcy and they could continue operating on a merger on the other side in a much stronger position."

GM, the biggest US automaker, has a bit more breathing room with its federal deadline for a new restructuring plan not due until June 1.

"I\’ve always said that GM has a lot of good product there, and if they can get through these difficult times, and engage in some of the very difficult choices that they\’ve already made, that they can emerge a strong, competitive, viable company," Obama said.

He added: "I would love to get the US government out of the auto business as quickly as possible."
 

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