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Obama Says GM, Chrysler Restructuring Plans Not Good Enough, Issues Ultimatum to Both

President Barack Obama says the restructuring plans created by General Motors (GM) and Chrysler LLC are not good enough to justify additional federal bailout funds and that the administration will offer a limited amount of time and operational funding for the companies to submit new plans. "What we are asking is difficult. It will require hard choices by companies," Obama said in a live speech this morning. "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 says GM will have 60 days during which time the auto task force will work with the company to create a "credible model for how to not only survive but succeed in this global competitive market." Regarding Chrysler, Obama said, "It is with deep reluctance but also a clear recognition of the facts that we have determined, after a careful review, that Chrysler needs a partner to remain viable." He says the company will have 30 days to reach a final agreement on its proposed partnership with Italian automaker Fiat, but that if it is not successful and no other viable partnership emerges, the government will not offer Chrysler additional funding. Obama also said that bankruptcy may be necessary for either or both companies to assist them in continuing operations. "What I am talking about is using our exiting legal structure as a tool that, with the backing of the U.S. government, can make it easier for General Motors and Chrysler to clear away the old debts that are weight them down so they can get back on their feet and onto a path to success." Obama also announced that former Deputy Labor Secretary Edward Montgomery will be appointed Director of Recovery for Auto Communities and Workers, a new position that will oversee rescue efforts in areas hardest hit, likening the process to the response when a natural disaster strikes.

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