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Open Thread: A New GM

post from Obama HQ on 01 June 2009 11:02:23 PM. © Obama HQ

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Open Thread: A New Beginning

post from Obama HQ on 01 June 2009 11:02:23 PM. © Obama HQ

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President Obama on the American Auto Industry:
The End of an Old GM, and the Beginning of a New GM

post from Obama HQ on 01 June 2009 05:10:26 PM. © Obama HQ

The President delivered remarks on the American auto industry this morning, shortly after auto giant General Motors filed for Chapter 11 bankruptcy protection. In his speech, the President outlined details of the plan his administration negotiated to restructure GM:

Working with my Auto Task Force, GM and its stakeholders have produced a viable, achievable plan that will give this iconic American company a chance to rise again. It's a plan tailored to the realities of today's auto market; a plan that positions GM to move toward profitability, even if it takes longer than expected for our economy to fully recover; and it's a plan that builds on GM's recent progress in making better cars. As this plan takes effect, GM will start building a larger share of its cars here at home, including fuel-efficient cars.

President Obama explained that the deal that has been worked out is tough but fair, and that all of GM's stakeholders -- the United Auto Workers, GM shareholders and bondholders -- would have to make sacrifices.

GM is an American company with tens of thousands of employees in this country, and responsibility for its future ultimately rests with us. That's why our government will be making a significant additional investment of about $30 billion in GM -- an investment that will entitle American taxpayers to ownership of about 60 percent of the new GM.

Now, let me talk about this. I recognize that this may give some Americans pause. So let me explain as clearly as possible why we are making this investment. We inherited a financial crisis unlike any that we've seen in our time. This crisis crippled private capital markets and forced us to take steps in our financial system -- and with our auto companies -- that we would not have otherwise even considered. These steps have put our government in the unwelcome position of owning large stakes in private companies for the simple and compelling reason that their survival and the success of our overall economy depend on it.

Understand we're making these investments not because I want to spend the American people's tax dollars, but because I want to protect them. Instead of taking so much stock in GM, we could have simply offered the company more loans. But for years, GM has been buried under an unsustainable mountain of debt. And piling an irresponsibly large debt on top of the new GM would mean simply repeating the mistakes of the past. So we are acting as reluctant shareholders -- because that is the only way to help GM succeed.

What we are not doing -- what I have no interest in doing -- is running GM. GM will be run by a private board of directors and management team with a track record in American manufacturing that reflects a commitment to innovation and quality. They -- and not the government -- will call the shots and make the decisions about how to turn this company around. The federal government will refrain from exercising its rights as a shareholder in all but the most fundamental corporate decisions. When a difficult decision has to be made on matters like where to open a new plant or what type of new car to make, the new GM, not the United States government, will make that decision.

In short, our goal is to get GM back on its feet, take a hands-off approach, and get out quickly.
...I recognize that today's news carries a particular importance because it's not just any company we're talking about -- it's GM. It's a company that's not only been a source of income, but a source of pride for generations of autoworkers and generations of Americans. But while the GM of the future will be different from the GM of the past, I am absolutely confident that if well managed, a new GM will emerge that can provide a new generation of Americans with a chance to live out their dreams, that can out-compete automakers around the world, and that can once again be an integral part of America's economic future.

Read the full text of the President's remarks . . .

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Prez Tilts Toward UAW

post from Obey Obama on 01 June 2009 02:57:00 PM. © Obey Obama

Nearly 28 years ago President Reagan fired striking air traffic controllers, in an action widely acknowledged to signal a new era of anti-unionism in America.

The American Labor Movement was in decline before the Reagan years, but the disastrous PATCO strike is seen symbolically and substantively as a turning point.

President Obama?s determination to save Chrysler and General Motors does not offer a great ?historical moment?, but it may prove as pivotal for our era as the Reagan -PATCO event did in the early 1980s.

The United Auto Workers, like most American unions, has had triumphs and failures, has had great leaders and pathetic ones, and has been bashed from the right and the left.

Some in the media conclude that Obama is obliged to defend the UAW because unions are part of his base. That?s simplistic.

In his remarks explaining the GM bailout, the President said that the government?s commitment to the domestic auto industry is an ?investment? so that ?our children can grow up in an America that still makes things.?

And his dedication to the autoworkers is an affirmation of his belief that wage earners deserve decent income and security.

Closing the income gap in the country will be enormously challenging to this Administration. By going way out on a limb for the auto industry ? and its unionized workforce - Obama is tilting public policy to institutions which advocate and agitate for increased wages.

With the asset wealth bubble popped ? along with some of the myths about the ?free market? - Americans want to know how they can recover their middle class status.

That should certainly make the union option a little more appealing.

And even more so with Obama?s willingness to stand firm with the UAW.

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http://laborlou.blogspot.com/2009/06/prez-tilts-toward-uaw.html

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Krugman Takes Ideology Too Far

post from Republicans for Obama - Public Blog on 01 June 2009 02:06:12 PM. © Republicans for Obama - Public Blog

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http://www.republicansforobama.org/?q=node/6677

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President to Deliver Remarks on the American
Automotive Industry at 11:55 AM EST

post from Obama HQ on 01 June 2009 10:07:19 AM. © Obama HQ

President Obama is scheduled to deliver remarks on the American automotive industry at 11:55 AM Eastern. You can watch a live stream of the event here.

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http://my.barackobama.com/page/community/post/obamaforamerica/gGGGNq

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Obama to talk on GM restructuring

President Barack Obama plans to announce his support for General Motors' restructuring plan at a noon appearance at the White House.

GM files for bankruptcy in Manhattan this morning.

The deal that will give U.S. taxpayers a 60 percent ownership stake in GM, and the government will infuse an additional $30 billion into the restructured company. A shakeup of the board of directors is part of the plan.

Albert Koch has been appointed restructuring czar for General Motors.

Later, Obama will visit the National Naval Medical Center in Bethesda, Md., a Washington suburb.

FOXNews

Obama to address GM bankruptcy on Monday

Washington Post - ?7 hours ago? AP WASHINGTON -- President Barack Obama plans to announce his support for General Motors' restructuring strategy at a midday appearance at the White House. ... Video: GM To File For Bankruptcy Today - Bloomberg