WASHINGTON — As General Motors and Chrysler race to submit plans today for assuring their long-term survival, President Barack Obama’s decision to have his top economic advisers bird-dog the auto-industry bailout shows how high the stakes have become — for Detroit, for Washington and for the nation’s economy.
The plans being submitted today represent the automakers’ response to a deadline the Bush administration imposed when it approved the short- term financial aid. The blueprints are intended to show how Chrysler and GM will reach a sustainable financial footing, which means shedding labor costs and the automakers’ debt burdens.
GM has received $9.4 billion in government loans and Chrysler $4 billion. Under the loan agreement, GM will receive another $4 billion and Chrysler $3 billion more today, an Obama administration official told The Associated Press, speaking on condition of anonymity because he was not authorized to discuss the payments.
Under the terms of the government loans, GM and Chrysler also must show that they are developing a more competitive mix of vehicles.
Negotiations between the automakers and the United Auto Workers over jobs and benefit costs reportedly were making progress late Monday, although the union was resisting making major concessions before bondholders and other creditors agree to accept cuts. Progress also was reported on the negotiations with bondholders.
GM is ready to deliver “a very full and detailed report” on its recovery plan, spokesman Steve Harris said. Chrysler spokeswoman Shawn Morgan said the company was committed to meeting the deadline as well.
Ford, financially the strongest of Detroit’s Big Three, has chosen to do without government loans and is not subject to today’s deadline.
The bailout agreement allowed Obama to name a “car czar” to analyze the restructuring plans, but he opted for a panel of experts led by his top economic advisers, Treasury Secretary Timothy Geithner and Lawrence Summers, director of the National Economic Council, and restructuring expert Ron Bloom.
