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The Obama Administration rejected the General Motors and Chrysler plans and GM CEO Rick Wagoner resigned at the President’s request. The President just announced the next steps. Wagoner’s ouster, he said, is not a “condemnation” but “a recognition that it will take a new vision and new direction to create the GM of the future.” Because the car companies and industry “must ultimately stand on their own, not as wards of the state,” Chrysler and GM will be given another 30 days to cook up a better plan; Chrysler is under the gun to find a partnership with Fiat or somebody. If they come up with something Obama can approve, they will be lent up to $6 billion to effect their plans; otherwise, bankruptcy.
Also, owners of GM and Chrysler cars learned “starting today the US Government will be standing behind your warranty.” There will be incentives, including a trade-in program to give car owners a price break for turning in their less fuel-efficient cars. Obama told the folks in Flint and other cartowns that he can’t promise there won’t be tough times, but “I will fight for you,” and that he intends to “make America’s auto industry in the 21st century what it was in the 20th century – unsurpassed around the world.”
You’d think conservatives would be delighted that the socialist Obama Administration is threatening to let the magic of the market work on the car companies, but the American Spectator cries fascism. Expect more of this as the day progresses.