Obama Faces Tough Decisions On US Auto Industry

By: Associated Press
By: Associated Press

WASHINGTON (AP) -- The Obama administration faces difficult choices on the fate of the U.S. auto industry.

They're weighing the cost of pouring billions more into struggling companies against possible bankruptcies that could undermine plans to jump-start the economy.

White House senior adviser David Axelrod says the administration will wait and see what General Motors and Chrysler come up with when they give a progress report Tuesday.

The companies are racing against a deadline to submit plans to the government to show how they can repay billions in government loans and return to viability despite a sharp decline in auto sales.

The terms of the federal loans set "targets" for concessions, largely from debt-holders and the United Auto Workers union.

Meanwhile negotiations between GM and the UAW have resumed. A person briefed on the talks says they're focusing on exchanging the company's cash payments into a union-run retiree health care trust for GM stock.

White House senior adviser David Axelrod says the administration has a major interest in supporting the auto industry and that the administration is giving the United Auto Workers and GM more time for concessions talks.

(Copyright 2009 by The Associated Press. All Rights Reserved.)

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  • by Dusty Location: Southern Colorado on Feb 16, 2009 at 12:21 PM
    I'll bet ten dollars against a stale donut to the first taker that the Democrats under Obama's leadership will recant and subsidize the UAW guaranteed wages and benefits at the taxpayers expense. The average working (non-union) American is having difficulty paying their bills but will be taxed so the auto workers can maintain their $100,000 per year wages.
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