It was a very sober President Obama who spoke to the nation Monday morning to announce that his administration has decided not to provide additional bailout money to General Motors and Chrysler, and to lay out his strategy for the auto industry's future. But the speech itself was up to the Obama team's usual standards, hitting all the points needed to provide at least some measure of reassurance to the nation -- though perhaps not to the autoworkers themselves -- and explaining, quite clearly, where the president wants to go from here.
"The pain being felt in places that rely on our auto industry is not the fault of our workers, who labor tirelessly and desperately want to see their companies succeed ... Rather, it is a failure of leadership -- from Washington to Detroit -- that led our auto companies to this point," Obama said. "Year after year, decade after decade, we have seen problems papered over and tough choices kicked down the road, even as foreign competitors outpaced us. Well, we have reached the end of that road."
That said, though, the president made clear that this does not mean he's going to completely abandon G.M. and Chrysler. "We cannot, we must not, and we will not let our auto industry simply vanish," he said. "But we also cannot continue to excuse poor decisions. And we cannot make the survival of our auto industry dependent on an unending flow of tax dollars. These companies -- and this industry -- must ultimately stand on their own, not as wards of the state."
With that in mind, Obama laid out a multi-point plan:
- Provide working capital for a brief period to the two companies, as G.M. works on a restructuring plan and Chrysler tries to arrange a merger with Fiat
- Consider bankruptcy if that doesn't work
- Establish a new fund that will enable the government to back warranties issued by G.M. and Chrysler
- Speed up new auto purchases for the federal government's fleet
- Launch a P.R. campaign to let Americans know about a tax deduction they'll receive if they buy a car this year
- Work with Congress on a plan to provide a credit toward a new car for consumers who turn in older, less fuel-efficient models
There's more required from those in the auto industry and working with it as well.
"What we are asking is difficult. It will require hard choices by companies. It will require unions and workers who have already made painful concessions to make even more. It will require creditors to recognize that they cannot hold out for the prospect of endless government bailouts," Obama said. "But I am confident that if we are each willing to do our part, then this restructuring, as painful as it will be in the short-term, will mark not an end, but a new beginning for a great American industry."
And speaking of ends, the president also did a very good job of explaining exactly what bankruptcy means in this context -- not the closure and breakup of the two companies, necessarily, but a restructuring. Given the usual connotations of the word, that was probably a necessary thing for him to do to provide some comfort to the American public.
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